Replies to post #777143 on Fannie Mae-No Politics (FNMA)

[CNorris2]

Usually when a haircut like that happens to preferred, commons get diluted. If jps take a haircut like that what do see happening to commons?

[LuLeVan]

That makes no sense at all:

That's why many on here are trying to convince commons into the JPS shares, drive the price up, so they can lower their cost basis.

Did you mean: "...increase the average cost basis?"

[kthomp19]

Anyone who has bought and held at $5-$6 a share would gladly take $10. Now, what about those who own a 25 par bought at $20, $18, $15, $12? It all depends on where the majority cost basis lays.

No it doesn't. $10 is $10 no matter what your cost basis is.

You should also go look at a FNMAS chart. It only traded above $12 for a short time in 2019, otherwise it has been below that since conservatorship started. Unless there is a large holder who bought before conservatorship and has managed to hold on ever since, I doubt any FNMAS holder has a cost basis anywhere near $12.

That's why many on here are trying to convince commons into the JPS shares, drive the price up, so they can lower their cost basis.

Lower their cost basis by buying more expensive shares? Math doesn't work that way. Lowering one's cost basis requires buying cheaper shares.

And you keep going on and on about other posters' motives for posting. Not only is that a TOS violation, it betrays your ignorance of said motives. Personally I want the junior pref prices to stay low so I can accumulate (which actually does lower my cost basis), and I don't care at all what common shareholders do as long as they don't push the junior pref prices up while I accumulate.

It's not a conversion that they keep pumping, but the fear of an actual offer below par.

Wrong. I would be willing to accept a below-par offer, depending on how far below. The offer that the juniors got in late 2020 obviously was too low.

And any below-par offer for the juniors means that the existing commons come out worse by comparison, so be careful what you wish for.