Replies to post #757109 on Fannie Mae-No Politics (FNMA)

[stvupdate]

There is a big chance, that warrants wouldn't be exercised in 2028 or earlier, but postponed until 2040/2050.
Don't You see, it's a strategy how to handle FNMA/FMCC.

[bradford86]

Oh. You think exercising the warrants is illegal.

They were issued in 2008.

My view is that it would be illegal not to exercise them. The government has to monetize its equity position to its fullest potential in order to protect taxpayers.

It is not the warrants that get the common shareholders as much as it is the spspa that exceeds the market value of the common equity.

The companies are underwater in an equity restructuring and commons have no dilution protection. It is like spilling a glass of milk into the sea. No way to get that milk back. Whereas jps are like a lifevest. They just float on top and are easy to get back.

Study up on your dilution mechanics young man!

[kthomp19]

Once the Warrants are exercised, new lawsuits begin.

Once those lawsuits are filed, FHFA and Treasury both start laughing so hard you will hear them all the way from DC.

Those lawsuits will not undo the dilution, and the most that common shareholders could recover is the drop in share price from the day before to the day of warrant exercise.

What violation of the law would the lawsuits be about anyway? Please please please say "takings" so that I can have a good guffaw myself.

And no, the statue of limitations countdown does not start until the warrants are exercised. Also, already stated by the plaintiffs lawyers.

Which plaintiff lawyers stated this? Please provide a link and a quote.