Replies to post #670902 on Fannie Mae-No Politics (FNMA)

[sortman]

The first conversion will be the warrants, add 5 billion shares.

[Steelhead9]

then on what basis is JPS converted to common ?

Don't they use the average share price for the last 30 days?

[kthomp19]

if TH does not believe common can be valued until we know the dilution (final number of shares)

(that is below - right?)

then on what basis is JPS converted to common ?

The conversion timing will be at the re-IPO, and the price will most likely be the re-IPO price so that the juniors and new common investors are on equal footing.

While knowing the exact number of final shares right now isn't possible, making an estimate using earnings and capital raises is. My estimates came out to around 40-60B shares when all is said and done, which might have to be adjusted for a reverse split.

Tim Howard's comment also discounts the possibility of multiple common raises. If there were more than one and the final share count is unknown to participants in the first round, they either wouldn't participate or would demand a very low price. If the final share count is known, there is little reason to break it into multiple rounds.

does he - you - me - pick A COMMON PRICE - THAT IS NOT POSSIBLE !!! -- to convert at ?

$2
$5
$12.50

the illogic - I believe is showing

Here's illogic for you: saying it's impossible to price the commons at all yet owning the commons anyway. If there is no basis whatsoever on which to estimate the future common price, there is no reason to own them. The same is true of any investment.

That's why, whenever I see someone project the future price of the commons, I ask to see their calculations. I have yet to see any reasonable math from those who project anything over $10.

he likely wants to convert at 2 dollars so 12 common per one $25 PAR but has no - zero - basis to show that is more correct than say $10

The framework I linked to above is just such a basis.



Something else to keep in mind is that the re-IPO price will not necessarily be related to the market price of the commons just before the offering. If a $5 re-IPO price is what it takes to raise the requisite amount of capital and clear the market, it doesn't matter if the commons trade higher than that beforehand.