Replies to post #524513 on Fannie Mae-No Politics (FNMA)

[Doc.007]

Please read Investopedia.com that will give you the Objective Legal Version.
Personally I did explain already everything in so many posts about The Warrants and Its Only Purpose !

Nobody Can Own A Company Just By Warrants, For That It Needs Real Shares Issued as Outstanding, But They're Not Existing According SEC, To Keep Well In Mind.
Many Here Like To Ignore This Legal Facts !

Happy FNMA Weekend

[contrarian bull]

Warrants and senior preferred are two different things.

The senior preferred are why they still need to pay Treasury almost 200B.

The warrants are a profit-sharing agreement, where whatever value f&f have after the conservatorship - Treasury gets just under 80% of that as a reward for being such a great conservator. In the form of shares of common stock.


And you are right - they can't own stock. That's why they own warrants. However they can sell the warrants to someone else for the value of the stock, or exercise them and immediately sell, without holding the actual shares. This is what they did with most of the other banks they bailed out.

Are the warrants the 79.1 percentage of the stock in thier possession they have been collecting on. If so and the nws has over paid on the balance plus the 10% why would the government be entitled to collect on that as well I'm not to up to speed on that legal part of it. Also I thought the government wasn't allowed to hold stock in a company

[Potty]

Fire, the Treasury and FnF entered into a contract way back when, part of that contract involved the Treasury receiving warrants for 80 % of FnF common stock at price of cents. Those warrants can be exercised till something like 2028.

So Treasury will probably sell those warrants either back to FnF in whole or in part, perhaps for the #10 billion the companies are owed in overpayment, OR Treasury will sell the warrants to investors as it did with other companies (like AIG etc)

The Tresaury makes as much money as it can by maximizing price of common -- since these are warrants for common shares, hence this incentivizes Treasury to maximize common price for our shares

There are, at least presently, no court challenge to warrants so far as I know

Hope that helps, potty