Replies to post #509014 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Your future share price valuation numbers/calculations are based on current market cap - which of course is complete gibberish.

Nope, you have misread something critical. The $300B that you point to is the future market cap, which is an estimate. I change that to $250B in some scenarios.

The current market cap of FnF is $2.69 * 1.15B (Fannie) + $2.58 * 0.65B (Freddie) = $4.77B. I just rounded it to $5B.

There's absolutely no relation between current market cap and future share price in the open market.

Again, I agree. That's why the $5B number only shows up once in my post, and only in relation to a senior-to-common conversion. It is not directly linked to any future market cap estimate.

Future share price will be based on earnings per share times a multiplier.

I agree here too. That's where my $250B comes from: $20B in earnings and a 12.5 P/E, or $25B in earnings and a 10 P/E. I think the real numbers will come in between both of those extremes (for both earnings and P/E), so I just use $250B as a ballpark.

Calabria could decide to mess with FnF's lines of business, so if I'm going to adjust that $250B it would be downward. A $200B future market cap is a good estimate for that scenario in my opinion.