Replies to post #846007 on Fannie Mae-No Politics (FNMA)

[bradford86]

i dont think they get wrecked; my base case is like $1-5 lower than current market price; if the government wants to; i think it can go lower; but i dont see the point in that either. but i think you can bet your bottom dollar that the government is going to monetize the spspa; and for the reason i dont recommend commons

[GreenShoots]

Just to be clear, I am expecting full dilution and all sps conversion to commons and FNMA with value of $300B. Having said that, I cannot come up with a scenario where IPO/SPO comes in less than $15 per share for current FNMA common holders. That’s my take and am (mostly) comfortable with the prospect of only getting to $15. If all the stars align and it goes higher, great. Longer term (say 3-5 years) I will see what dividends (if any) look like. In the absence of dividends, I will look for exit during exuberance periods.