I own and am trading this stock myself, and Im sorry, but I still think its worthless. This article will cause a pop, and I don't get why. Clearly he saying PREFERREDS may be a good investment, not commons. This guy is trying to run the show taking it back to private. I have to agree that commons get wiped out......Im still buying and trading until then....why?
This is basically like baseball cards. They really aren't good for anything, but they can go up and down based on supply and demand.
If lack of assets were an issue then true commons "lack" of worth may be an issue but that is not the case here. With Fannie Mae making billions then that is not the case. Having Fannie giving all profits to the gov't and only being allowed to keep 3 billion on the books is the issue. What's happening is the big money after promoting the "commons", the switch was made to promote the "preferred". They short the commons and make money. They bought the preferred low and now make money on the preferred gains. That is until everyone realizes that with the way things stand now the preferred aren't worth anything either. Commons and Preferreds are all in the same boat - dead in the water until Fannie and all shareholders are able to realize the profits.... when the everyone starts to realize this big money will simply short the preferreds and make money as the PPS drops on those as well. The one thing all shareholders got going for them is if FnF are going to be wound down then first the $117 Billion will be paid off which means Fannie will then be able to realize the profits and not just be giving all profits to the gov't. Now I'm not saying Fannie will be would down because Fannie is woven into the fabric of our RE mortgage market and should a new entity in fact be formed then Sallie Mae is the road map on how it will be done - that is the shares were transfered 1: 1 and the shareholders were first protected then rewarded. But to say the preferred shares are a better investment is nothing but hype with the way things stand now.
It is not an automatic wipe out for commons. When Sallie Mae went pvt, commons exchanged for shares in the "new" company. Everyone writing these articles on FNMA are throwing stuff at the wall to see if anything sticks. I'm sure the Government will create a "solution" that is unlike anything being tossed about as entertainment in these articles and Posts.
I know what your saying....I just cant say it would surprise me to wake up one morning and find the government royally #@$'ed us. There are so many people beating the drum in Congress that Fannie must pay for the housing colapse. I think Fannie should stay together, but it seems to me that they got sacked with alot of bad loans from others who got out of the game, and are left to be the scapegoat.
^^^^^^^ I agree with barganguy.. You have to be cautious.. All I hear about is how everyone is going to be rich.. Dont sell your car and laptop for these shares like speedracer did for these shares because there is a chance we might own toilet paper. Ride the dips..
I disagree and many also ; preferred and Commons are not that much different other than who gets paid first ; but at the end Preferreds are second last to getting paid and Commons last ; so if Fannie is making profits up to 2015-2016 and if it is enough both Preferreds and Commons get paid