Replies to post #744132 on Fannie Mae-No Politics (FNMA)

[kthomp19]

But if anyone does their due diligence they will see just how badly (a civilian conservator would be behind bars by now for implementing the NWS) their new partner has treated the current round of 1st Loss Private Capital position Shareholders.

Not the current round. The shareholder mistreatment that the lawsuits were about happened in 2008 and 2012. It's people who held shares at those times who got screwed. Shareholders in 2023 are just free riders at this point.

Investors in a re-IPO will be stepping into the shoes of pre-conservatorship shareholders. They are not going to care at all what happens to 2023 shareholders. If 2023 shareholders are singled out for good treatment, all it would tell new investors is that they would have to wait 15 years to be made whole if the government acts up again.

They are going to have to ask themselves:

1. Can I trust the US government as a partner when it says one thing like the conservatorship will be temporary and then takes all the future profits for itself after inflating noncash losses and subsequently reversing them for over $100,000,000,000 in 2013 alone?

2. How do I know that the federal government won't do it again and look at how ineffective the courts have been?

No administration can bind future administrations on these matters, especially now that the President can fire the FHFA Director at will.

The only way to get a shareholder protection agreement to stick is to have the companies be one of the parties and release them from conservatorship so that FHFA can't act on the companies' behalf. Any future attempted imposition of conservatorship will be immediately challenged via 12 USC 4617(a)(5)(A).

All the past mistreatment of 2008 and 2012 shareholders will do is lower the per share re-IPO price. It could even push that price so low that the re-IPO fails entirely, which means FnF would be in conservatorship for at least the next 6 years (the point at which they could hit a 2.5% capital requirement with the seniors written down or converted to commons).



Upshot: all the talk of "if the government continues to screw existing shareholders then who would buy new shares?" needs to stop. It is a fallacious and counterproductive argument.

[Rodney5]

The FHFA Director used the wording IPO...

No mention of a Secondary IPO or Re-IPO.

This is an indication either the existing shareholders will be wiped out in a receivership afterwards the Treasury sells the companies in the open market, OR the Treasury buys the existing shareholders out and sells the companies in the open market.

FHFA Director Sandra L. Thompson Quote: “If the enterprises ever get out of conservatorship everybody knows it's going to be the largest IPO ever. But there are questions investors will want to know”. End of Quote.

[Donotunderstand]

Robert Yes

This argument - that what they did and do to us - can scare away prospects may be why things to nowhere

(I will remind - the market has a remarkable short memory on many occassions)