Replies to post #569325 on Fannie Mae (FNMA)

[mrfence]

If GSEs were liquidated then Seniors would get paid first but there's no set amount owed to them in the first place so nothing to deduct from net worth. 3bil has been all the GSEs have been allowed to retain for quite some time until now. The new figure is 25bil for FNMA. The whole thing is still a mess. The sooner the courts kick da Gooberment in the nuts again the better :-D

[gta888]

I am not 100% sure either sorry. Whole situation is better but in some sense also not ideal. Like saying your free but I still have a leash on you. Keeping thinking this agreement and new build amount on top of existing SPSA will play a role in the final negotiations.

[FaithfulAndTrue]

Their net worth is actually $6.4 billion as of June 30, 2019.

8-K: https://fanniemae.gcs-web.com/node/26416/html

[kthomp19]

Is it generally accepted accounting principles to not count all preferred stock liquidation value against net worth?

Just look at the balance sheet. If you see a positive number in the equity section, that line contributes positive value towards net worth. As in, deleting that item would cause net worth to go down.

Preferred stock is, in every case I have ever seen (including FnF), a positive number on the balance sheet in the equity section.

I always thought that it should not only count against shareholder value, but against net worth too.

Stop thinking of preferred shares of liabilities, and instead think of them for what they are: equity. They add to net worth rather than counting against it. Net worth and equity are the same on the balance sheet, each one is equal to total assets minus total liabilities.

It makes more sense when you realize that preferred shareholders are shareholders themselves. Therefore, when you talk about "shareholder value", that includes preferred shareholders.