I think most of the media has purposely overlooked the fundamental agreements of the c-ship. No one talks about the basic rules that are very apparent and easy to understand. If read objectively, they say all that needs to be said regarding the future of FnF. Everything else is white noise created to expel any weak hands from holding a stock that inevitably WILL go up as long as the companies are profitable.
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.
That's pretty cut and dry to me.. Stockholders can't make decisions for the company. (that's left to the conservator) However, each share retains as much value as the market is willing to say it worth. That cannot be taken away, in or out of c-ship.
If the market determines the companies are worth $20 a share by virtue of earnings and future financial outlook, then $20 a share is what we're owed if they are dissolved.(re-formed)
Q: Can the Company be dissolved?
A: Although the company can be liquidated as explained above, by statute the charter of the Company must be transferred to a new entity and can only be dissolved by an Act of Congress.
Agreed. Patience, and not bing fooled by the storm of empty nonsense, is what is required. Even if Fannie is shrunk to pre-crisis levels, as Obama described in his Zillow interview, this is a $60 stock. Otherwise, $200+. The stock remains undiluted.
They cannot be liquidated as long as they are profitable.
Q: Can the Conservator determine to liquidate the Company?
A: The Conservator cannot make a determination to liquidate the Company, although, short of that, the Conservator has the authority to run the company in whatever way will best achieve the Conservator’s goals (discussed above). However, assuming a statutory ground exists and the Director of FHFA determines that the financial condition of the company requires it, the Director does have the discretion to place any regulated entity, including the Company, into receivership. Receivership is a statutory process for the liquidation of a regulated entity. There are no plans to liquidate the Company.
This statement "However, assuming a statutory ground exists and the Director of FHFA determines that the financial condition of the company requires it" is key.
Receivership only if "required". Hmmm. What can be presented as a case for a required receivership?
Until then, the lawyers and FHFA will determine how much they can sneak away with in Sr. Pfd. dividends, as the thievery continues. But, this too shall pass. Once they are net-zero / net-positive, the media will have to stop the "will never pay back" mantra. They will have paid back the money, and soon.