Replies to post #783052 on Fannie Mae-No Politics (FNMA)

[blownaccount9]

You could very well be correct, but I’m presuming it will take at least 18-24 months just to get through the process of returning to private hands.

If we get a CEO that is worth anything they’ll have the senior prefs written down and they’ll ask for warrants to be utilized by the government to create their value. Then once senior prefs are gone CEO says I’ll repurchase those warrants at “fair value” using price data from past 10 years. Of course that is just a pipe dream but I’d love to see it happen

[bradford86]

Spspa if monetized can be exceedingly dilutive for common interests. But my view is that going this route kind of wipes commons

The main thing for commons is if the government wants to spend the warrant money and values it over spspa money. Mnuchin seemed to think it was illegal to just write spspa to zero. That may have changed since they breached contract

[kthomp19]

Also anything under $100 within 24 months of priv doesn't account for the velocity of the upcoming environment FnF will be the main cog in.

What are your estimates of the three components of the future common share price? Those three are earnings, P/E multiple, and share count.

You seem to be projecting much higher earnings going forward, and a $100 share price would mean a rather low share count.

Without the two GSEs privatized, there is no housing market growth.

This can't be right as evidenced by the fact that FnF's balance sheets have risen very quickly in the last few years even while they were in conservatorship.