Replies to post #777137 on Fannie Mae-No Politics (FNMA)

[Louie_Louie]

Yes, understood. Here's a simple example:
If the majority (let's say 60%) of say FNMAT own those at a cost basis of $2, and you own at a cost basis of $10. If Fannie offered a $6 buyout of FNMAT, how do you think the vote would go? You obviously would not vote for it. They'd offer via a vote, so no contract problem involved.

If you think 60% of the FNMAT shareholders would jump on $6, you're right. Where does that leave you? This is why GB and others with HIGH cost basis are desperate to get the price up and folks to buy. They need their cost basis drastically reduced.

No no one knows what the cost basis is in all the JPS classes.... Except government/FHFA/GSE's.
So when offers for buyouts start happening, be sure you're on the cost basis low side!

FYI, this would apply to commons also, but commons are not debt!