Replies to post #494824 on Fannie Mae-No Politics (FNMA)

[trunkmonk]

thanks, u seem to know some stuff about GSEs. although i dont agree almost 100% of the time, we need people who are short or there for other reasons not in agreement with shareholders.

[YoYoMa57]

Actually with SPS conversion and resating of a say a 5 percent dividend all share classes will get dividends...If they cancel common warrants (which would be likely because that would put US gov past 80 percent threshold) common go to 30, Ps go to par and start paying divies...Tax payer slowly exits while making another 200 billion

[chessmaster315]

The Warrants are not a golden goose. The NWS is the golden goose.
So far, the warrants have not cost shareholders a penny. But the NWS has cost shareholders "virtually everything"...hundreds of billions of dollars belonging to shareholders "swept" into government coffers.

We need to "put out the NWS fire" and THEN we can try to figure out if the NWS fire burned up all the timber.

There are a few people "obsessed" with the warrants. The decrease in value is not due to the warrants..its due to the NWS taking all the earnings. A company is valued based on "earnings", in other words the P/E ratio.
Almost any company can "dilute" the current shareholders by issuing new shares. And, this can anger current shareholders. But worrying about the warrants is premature. We need to get rid of the cship and the NWS.
The 79.9 % is a maximum..it does not mean that there will be 30 billion new common shareholders. While its true, fnma may need to raise capital..by issuing new shares after the cship and nws end, the new board of directors will weigh whether this should be accomplished by new common, or, like in the past, new preferred shares. That is why there are so many preferreds: Fannie uses those to raise capital:


http://www.fanniemae.com/portal/about-fm/investor-relations/stock-information.html in part:

• 5.25% Non-Cumulative Preferred Stock, Series D (PDF)
• 5.10% Non-Cumulative Preferred Stock, Series E (PDF)
• Variable Rate Non-Cumulative Preferred Stock, Series F (PDF)
• Variable Rate Non-Cumulative Preferred Stock, Series G (PDF)
• 5.81% Non-Cumulative Preferred Stock, Series H (PDF)
• 5.375% Non-Cumulative Preferred Stock, Series I (PDF)
• 5.125% Non-Cumulative Preferred Stock, Series L (PDF)
• 4.75% Non-Cumulative Preferred Stock, Series M (PDF)
• 5.50% Non-Cumulative Preferred Stock, Series N (PDF)
• Variable Rate Non-Cumulative Preferred Stock, Series O (PDF)
• 5.375% Non-Cumulative Convertible Series 2004-1 Preferred Stock (PDF)
• Variable Rate Non-Cumulative Preferred Stock, Series P (PDF)
• 6.75% Non-Cumulative Preferred Stock, Series Q (PDF)
• 7.625% Non-Cumulative Preferred Stock, Series R (PDF)
• Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series S (PDF)
• 8.25% Non-Cumulative Preferred Stock, Series T (PDF)

[Brooge warrants cancelled]

aren't you up on your investment? be happy and STFU