Replies to post #512700 on Fannie Mae-No Politics (FNMA)

[kthomp19]

so how do you see the warrant, what is it and where does it stand for in your opinion?

I think the warrants were issued for two reasons.

1) To depress the companies' common share price and make them seem like they were in more trouble than they really were. This is backed up by one of the released documents from Sweeney's court.
2) To provide Treasury with even more money than they would get from the seniors alone.

I just don't see any reason for Treasury to not exercise them, unless they convert the seniors to commons (in which case it won't matter if the warrants are exercised or not). I don't buy all the lawsuit threats, and I don't think Treasury is even allowed to just throw away an asset for no consideration in return.