Excellent post. I fully agree that warrants will be exercised and placed into the Sovereign Wealth Fund. Sorry Guido but that is how the cookie crumbles. It is out of our control. Lawsuits are welcome but it will be an uphill battle to win IMHO. I believe warrants will be directly placed into the Sovereign Wealth Fund as unsold shares. Therefore selling them at $40-60 seems reasonable. How did you get $90 ? I'm expecting net income to significantly rise as Pulte gets rid of the fraud abuse and waste in the next six months. One thing is for certain. Pulte will make sure the GSEs are well oiled and firing all on cylinders before placing them in the SWF. Only then will a high strike price be achieved.
As far as spoken and written words go, you are correct. The powerful have unanimously indicated that their plans include exercising the warrants. However, consider some thoughts from an old coot.
My Plan for the GSEs in SWF:
SPS is zeroed and warrants cancelled. Shares of both easily cross $300. Fannie & Freddie market capitalization would roughly be equal to: (1.16B+.65B)x300= $543 billion.
FnF own roughly 60% of the MBS market and Ginnie Mae owns 40%. The total MBS pie is worth $905 billion. What if our government finally does the right thing and puts Ginnie Mae in the SWF with it's estimated value of $905-543= $347 billion?
Please recheck my math. Have to run some chores. 3 and out.
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