Replies to post #491644 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Because the 2 companies together have a value of about 300 billion dollars when they are recapitalized. That corresponds to a conservative P/E ratio of 15.

Both of those numbers (the $300B market cap and 15x multiple) are wildly optimistic, compared to both the Moelis projections and any other that I have seen. FnF earnings are much more likely to go down than up with Calabria at the helm.

How many shares are outstanding? 1,8B
With Warrants: 9B
What is the value of the JPS? approx. 32B?
What's PPS? In this case: 208B/9B = $23,11
Now you have your $20+

That's without a junior conversion, but more importantly that's without any secondary offering whatsoever. Where is the money going to come from to recap the companies if not a secondary offering? And why would that money be willing to pay a price per share higher than that in the market?

Shares outstanding now: 1.8B
Shares issued via junior conversion (half of shares converted at 6:1 ratio): 7.95B
Warrant shares: 39B
Combined market cap of companies: $200B
Price per share: $4.10

That's without a secondary offering!