Replies to post #19918 on Freddie Mac-No Politics (FMCC)

[Entangled Proton]

It depends on the amount of profits. Pay order will be Senior Preferred, Junior Preferred, then common.

[prokopton]

I don't think the company is in receivership but it's in conservatorship. As long as the company is in convervatorship, common shareholders don't get paid dividends, only the preferred shareholders.

There are two types of preferred shares right now:

--those held by private investors (hedge funds), who want to convert their preferred shares to common shares.

--those held by the government. I think if all preferred shares were converted to common shares the government (tax payers) would own about 80% of the company (not sure the exact number but it's high).

The hedge funds want to privatize the company and take the preferred shares off the government. If that happens, then common shareholders get paid dividends.

[InsiderOutfo]

Dividends can be paid out to shareholders of common stock after preferred dividends are paid. The US government owns preferred shares and the dividends go to them. Common shares do not get a slice of the pie unless the US government once again privatizes FNMA and FMCC, which they won't until tax payer money is paid back. Give it some time.