Replies to post #784627 on Fannie Mae-No Politics (FNMA)

[JoEy D BuLL]

20% of $400 is $80... If they do an IPO, our shares will already be ours as if we already bought in pre IPO. We can sell at IPO. Why would they do it any other way? Most will hold on for the dividends anyway and the likely rise in price after IPO.

[Stern is Bald]

Bwahaha oh here we go again w/ the you know these will be released and that is set in stone...

Keep dreaming dude.. I know you jps holders are bewildered when during these price jumps nothing happens in jps land ...

[LuLeVan]

So the challenge for common shareholders will be to hold until the "Trump will save us all" rally tops out. The trick will be to sell before the release announcement hits, because commons could very well fall below 10 cents after that.

[kthomp19]

I have no doubt that Fannie and Freddie stock prices (all classes) will rise with Trump's election chances.

I agree. I expect prices of both the commons and juniors to go up at roughly the same rate until the election.

But I very much doubt that a release under Trump - which so many here are hoping for - will be accompanied by a write-down of the SPS. Even under Trump, commons are at risk of severe dilution from an SPS-to-common conversion. After all, he wrote in his famous letter that he wants to get the maximum out of this deal for taxpayers. Trump will not get the maximum if he settles for just the warrant exercise.

Right. Trump's words were that he would have "sold the government's common stock in these companies at a huge profit". That doesn't have to mean a senior-to-common conversion but it certainly doesn't rule that conversion out. It does mean that there is no reason to believe Trump would both write off the seniors and cancel the warrants.

When trading resumes, the legacy commons will no longer exist. You'll find the newco commons (FNM, FMC) in your brokerage account.

I disagree. The only way newcos can happen is either Congress passing specific legislation or FHFA putting FnF into receivership, neither of which I think are even remotely likely. That means the legacy common would still exist, though changing the ticker symbols may or may not happen.