Let people get educated.......mostly pumpers on the board trying to mis-inform you
Things they will say
1) Record Profit for Fannie Mae
However, they won't mention that profit does not get trickled down to the common share holder, currently Gov't takes majority of the profit, common share holders are left with little value. Agreed by major analysts.
2) Conservatorship was unconstitutional
However, they won't mention that it's purely speculation. AIG, and ObamaCare also filed the similar "unconstitutional" lawsuit against the Gov't, supreme court already upheld Obamacare, and AIG company isn't backing the lawsuit filed by it's former CEO.
Think about it, it if was unconstitutional, why are lawsuit only popping up once Fannie made profit, what happened during the last four year ?
3) Bashers are Shorting the stock
However, they won't mention an institute that lets you or I short this stock, just call your institute and you will know the truth.
4) Big Hedge Funds buying FNMA
However, they won't mention that Hedge Funds are buying "Preferred Stock", not common stock. There's a big difference between the two and common stock are junior shares and last in line for asset distribution. Buying preferred stock puts you in the same position as the government, while common stock are does not have any real value.
5) Fannie Mae getting Relisted soon
Purely Speculation, to get relisted on NYSE, Fannie needs to apply and provide financial statements, since Fannie Mae is currently under Gov't control, there is no plan, no talk of relisting this stock. In-fact, there are two bills out in the senate, one is to eliminate/wind down Fannie Mae, another is to merge Fannie and Freddie into another new company.
6) Fannie Mae is super cheap
However, they will not provide you with any real valuation calculation. They will refer back to the record profits but won't mention that majority of profit is going to the Gov't and not adding value to the company.
1) yes it is record profits. after the amendment to the GSE agreement (2012) all profits in excess of 3 billion will go towards treasury in the form of dividends. government chose dividend so that fnf liabilities will not be on the federal government books (5.3 trillion i believe). government owns senior prefer shares and warrants for ownership of 79.9 percent. government only chose 79.9 percent owner ship due to tax reasons (don't ask me but look at the irs website). as part of the change in the new amendment... all profits now go towards treasury so that fnf will no longer have to borrow money from the treasury to pay the debt own to the treasury (debt + 10%). common shares are value as stated in the FHFA GSE website.
Q: What happens to the Company’s stock during the conservatorship?
A: During the conservatorship, the Company’s stock will continue to trade. However, by statute, the powers of the stockholders are suspended until the conservatorship is terminated. Stockholders will continue to retain
all rights in the stock’s financial worth; as such worth is determined by the market.
2) up to the courts to decide. my view is conservatorship was legal but the amendment of taking all profits in excess of 3 billion is not. conservatorship job is to:
Q: What are the powers of the Conservator?
A: The FHFA, as Conservator, may take all actions necessary and appropriate to (1) put the
Company in a sound and solvent condition and (2) carry on the Company’s business and
preserve and conserve the assets and property of the Company.
Q: When will the conservatorship period end?
A: Upon the Director’s determination that the Conservator’s plan to restore the Company to a safe and solvent condition has been completed successfully, the Director will issue an order terminating the conservatorship. At present, there is no exact time frame that can be given as to when this conservatorship may end.
4) Hedge fund is actually buying both but mostly preferred.
actually buying preferred doesnt put you in the same standing as government. preferred is still a step behind senior preferred. and also it will depend the exit of fnf. if it follows sallie mae (which it looking like it will) then all senior/preferred will be diluted into the common share and new shares will be issued. in the case of sallie mae it was a 1:1 ratio. as for commons have no value view my comments on 1)
5) true is just talk. its true there are two bills. but corker's bill is already view as dead on arrive. there is a 5% chance it will get out of subcommittee and if it does then 2% chance passing. also the other bill is to create a new entity has small chance of passing of which the shareholders will still be compensated if wind down/transfer.
6) it being supper cheap... its just talk
Dude, I think your intentions are noble, however; I think folks take umbrage at you coming on this mssg board with a patronizing attitude of trying to educate the dumb people of the world.
That can, and does, rub people the wrong way. I think you are way underestimating the average bloke who invests in these stocks.
Your points are overblown and smacks of condescension, and, frankly that's why some of the crusty veterans of this board are giving you a hard time and making fun of you.
Just ponder this factoid, pal. FNMA & FMCC are probably the most famous stocks in the investing universe.
Do you believe anybody on this mssg board don't know that there are a myriad players here at any time playing every possible angle imaginable?
Folks have seen it all and experienced it all here, eh.
I mean everybody here knows you live under constant threat of: bear raids, short squeezes, naked shorts; pump n' dump, etc.; you name it we've experienced it.
So, your warnings and attempts to save people from themselves comes across as pretentious.
Folks are trying to figure out what is your deal, eh?
Wow, best post I have read all week, your right, my posts were condescending, but that wasn't the tone I was aiming for, I guess this board have made me evil...lol
My deal is just to help 1-2 people make the right decision...and help state the facts...nothing more, nothing less....If this stock goes to $20 tomorrow it won't bother me, nor will I loose any sleep if it goes to zero.
There is alot of documented truth in your comment that cannot be disputed by those with rational intelligence.
However, these yahoo boards are not the place for expecting rational and civil answers and debate. Sadly, these boards are filled with low IQ dimwits and starry-eyed dreamers who just happen to have enough money to open a trading account, and the sharks of wall street love them for it.
The dreamers dont want to hear fact and logic. All they want to hear is "to the moon" and other mindless soundbites that give them soothing comfort and confidence.
There are other message boards that have serious discussions about the GSE's, but this board isnt one of them. I come here strictly for cheap entertainment.
So here's the thing.. people will post those numbers only because it is reasoning for the government not to dismantle them. They are solid companies. There was plenty of fallout from the 2008 crisis but lets not get all emotional about it. The gov't should make a sound decision to pay back the tax payers.
Majority of the people here aren't original owners back in 2008, they are just recently purchased the stock and is now pumping it hoping to get a piece of the action. This could be clearly seen by the fact that these lawsuit started when Fannie and Freddie turned a profit.