Replies to post #500029 on Fannie Mae-No Politics (FNMA)

[3antar]

I think we will be higher soon, maybe tomorrow

[kthomp19]

You would think with words ending conservatorship and finding ways to recap stock would be higher than 2.35.

The giant unknown is how the recap will happen. How this affects the common shares is that nobody knows yet how many shares will be offered and at what price. There's also uncertainty over whether Otting or Calabria will shrink the companies' footprint, which reduces earnings. It's hard to value a stock when you don't know what the earnings are going to be.

There's also the execution risk: the whole thing can still get derailed. That's why the prefs are also low.