Replies to post #405353 on Fannie Mae-No Politics (FNMA)

[Clark6290]

Sell them all, plenty of buyers today.

[capitalismforever]

Do I read the balance sheet right? stockholder equity for preferred is about $34/share and about 50c/share for commons.

Stock holder equity for preferreds is a cumulate value of $19.13b.

Where do I read guidance on which pfds to buy?

Fannie and Freddie have information about their preferred shares in the investor relations section of their respective websites.

[Pecker9Wood]

I don't get it. If I sell my common I will make a gain several times .50 a share. Not bad for what I have invested.

[Donotunderstand]

Fannie Mae's Tangible unconsolidated Book Value is $37.45b

And the obligation to preferred appears to be 19B

Depending on the NWS action and profitability of F and F going forward --- the preferred start to get .....

at the moment there is still huge upside to the common if say the next 5B of profit is not swept

[contrarian bull]

My understanding is that all preferred shares are treated equally. So they all should receive the same percentage of face value in a liquidation. However the price varies quite a bit from series to series even taking into account that some have a face of $25 and some are $50.

My suspicion is that there are some hoping that the suspended dividends for preferred shares might someday be given out by a court decision - so the ones with more accumulated unpaid dividends may be worth more. The theory is that the net worth sweep is a dividend on the senior preferred - and based on the wording of the preferred shares they get their dividends as long as the company gives out any dividend to any class of stock.

My recommendation as to which preferred to buy - I think getting unpaid dividends is very unlikely, so I just buy the cheapest ones. Maybe I'm missing some important detail? Also be careful that some of these are very lightly traded with a huge difference between bid and ask, so never, never do a market order!

Also - my understanding is that until the preferred shares are paid at 100% the common shares get zero in a liquidation. The "preference" is complete, not a percentage.