Replies to post #615105 on Fannie Mae-No Politics (FNMA)

[kthomp19]

you want to issue shares from a company that has dozens of lawsuits from shareholders who feel mistreated?

Yes.

And you want to issue even more shares while the litigation is going on?

Doubtful, but it depends on which litigation. Washington Federal doesn't need to be resolved before the equity raise because it only involves damages to pre-conservatorship shareholders, and the money would come from Treasury.

and that would not be a fiduciary problem for the company towards the “old” holders?

No, because FHFA doesn't have a fiduciary duty to shareholders, and while in conservatorship the boards have no power at all.

What exactly does the BOD do in your opinion?

Whatever FHFA tells them to do. You might want to read this excerpt from page 1 of Fannie's 2019 10-K:

Our directors do not have any fiduciary duties to any person or entity except to the conservator and, accordingly, are not obligated to consider the interests of the company, the holders of our equity or debt securities, or the holders of Fannie Mae MBS unless specifically directed to do so by the conservator.

Another strikeout, how shameful.

[FFFacts]

Sorry I don’t follow, you want to issue shares from a company that has dozens of lawsuits from shareholders who feel mistreated? And you want to issue even more shares while the litigation is going on ? and that would not be a fiduciary problem for the company towards the “old” holders?
What exactly does the BOD do in your opinion?

It's not up to me to decide on the issuance of new shares. Nothing would prevent them from doing so, whether in conservatorship or not. I agree shareholders feel mistreated but that doesn't mean legacy holders can't be offered a rights offering or warrants, even thought it is not required, but it would be a good gesture. Although, there is nothing that requires the BOD to treat legacy share holders favorably. The board doesn't have authority to do much without the consent of the conservator.