Replies to post #508128 on Fannie Mae-No Politics (FNMA)

[kthomp19]

where ibhave issue with other pref holder is some say they will be diluted to kingdom come where i just dont see that

I haven't said that they will, but I have said that they can. The lower the secondary offering price, the more of the companies the new buyers get.

Boiled down, more dilution = more money for the new buyers. What do you think they are going to push for?

Common holder wont get screwed but will gets whats equitable

Whose definition of "equitable" are you using? Poor Dude on Seeking Alpha wants multiple trillions. John Carney wants it to be zero.

no one is going to invest 100 billion into a company this closely tied to gov after legacy got raked over the coals and then dick punched as they were about to recover

The problem here is that the pre-conservatorship shareholder base and the current shareholder base have very little overlap.

The new buyers will be standing in the shoes of the pre-conservatorship shareholders in the case of another fiasco like this one. Seeing current shareholders rewarded won't reassure them at all. What would reassure them would be payouts to only those who held shares in 2008 (and maybe 2012 due to the NWS), but that violates the "rights travel with shares" principle.

The "legacy got raked over the coals" thing already happened. Nothing this administration, or any other, can ever do will completely take the option of it happening again off the table.