Replies to post #708606 on Fannie Mae-No Politics (FNMA)

[bradford86]

there are two ways to get rid of the spspa liquidation preference:

1. convert to common ($0.10 common value)
2. write it down ($5-8 common value)

the government maximizes its piece of the pie with #1, but plaintiff lawyer thompson pointed out that perhaps #2 would yield a higher ipo price for the government's stake and increase market participation so it may be worth it?

pretty sure government will go with #1 on this conundrum in the name of protecting the taxpayer. no reason to give away taxpayer dollars to shareholders -- so goes that narrative