Replies to post #558019 on Fannie Mae-No Politics (FNMA)

[Potty]

Please sticky this post -- this video is a very clear, and judicious, summary of the recent developments and potential/risk for common and preferred

Really nice job of breaking down the remaining options -- believes NWS suspension, and settlement, coming

The SP target of $6-14 on common is encouraging, I would tend to the higher end of that range $10-14 -- which is right where a Moelis style plan, with alterations, had us

If a settlement locks in certain changes, then we might see a longer plan for raising capital by retaining earnings -- that is VERY good for common and if the settlement includes converting pref to common, then also VERY good for prefs

All in all, great summary

[mrfence]

They're off by at least 500%. $30-$70 PPS after removing the Government ownership metric.

$FNMA~CHEERS :-)

[matmlg]

This is old news at this point (9/12). Why would this "move the market today"? imo, we continue to trade up leading into the end of the month in anticipation of the letter from treasury directing the companies to increase their capital buffers in lieu of sweeping it to the treasury.

[RumplePigSkin]

So is the ACG price estimation a near term estimate based on the networth sweep ending this month?

Best case scenario IMO over next several months:
- Possible tax exemption/minimal rate until FnF attain ~ $100M. Within 4 or 5 years this could happen based on historical earnings - Allows for faster organic recapitalization instead of additional equity/IPO
- JPS are not converted, go to par, and dividend payments resume - need help on this one as I’m not sure about the damages/compensation the JPS lawsuit is seeking
- 50 basis pt payment to Gov for similar backing like FDIC for bank deposits
- SPS and Warrants deemed paid and cancelled, respectively
Result: Essentially recap and release

Worst case scenario has significant dilution to FnF, although how can private equity/capital be sufficiently raised if these companies have a massive bloated float only to do a reverse split, or some shennanigans. Future/prospective investors would be hesitant to risk capital with FnF if they know they also could be massively diluted in the future also. Need to treat existing shareholders as well as future shareholders to build trust with the investment community.