I have owned FnF for 4+ years and follow very closely. Like clockwork what will happen Tuesday is an immediate drop in the morning to the 1.30 level. At the end of the day closing should be at around $1.40. Very predictable folks. For me I plan to continue holding as I have for 4+ years. Tuesday is just another day in the life of FnF.
Haters make a big deal of it, risky, because of the misleading REUTERS headline (probably carefully crafted by an interested party) and the need of hedge funds and shorts to use any and everything available to create fear, doubt and uncertainty and grab shares as cheaply as possible. It's just a headline with the words 'replace FnF'.
You can bet there will be several million shares sold at open tomorrow to try to create panic selling, but I think it's likely to turn into a bear trap, and reversal of fortunes for sellers.
The reality is this is just a company created to help FnF develop a uniform and cooperative method of securitizing a new type of paper that will allow private capital to participate on a limited basis (about 10% of risk) in certain specific types with LOWER ratings and HIGHER returns for investors.
The real news here is that FnF cannot be replaced and everyone, including congress, has finally figured that out. IF, decades from now a new model rises up to ENCOURAGE reluctant private capital to SHARE a significant amount of risk (significant = 50%) with the government/taxpayers THEN there may be significant GRADUAL changes in the secondary market which will most likely benefit EVERYONE including FnF
Agree with your thinking here! I'll offer this educated prediction: The uninformed public, fueled by headlines and dispensed misinformation, will dictate some panic sells here. Then, over the course of the next 7-10 days, the media will spin it until the cycle stops on: The FHFA is looking out for the American public and FnF are a part of the master plan. I expect a short term drop in pps due to the ignorance. Traders/Flippers/Shorts should benefit by the drop and subsequent rise back up to above where we are today. The C-ship situation (thus a stock moving primarily on news and emotions) is really a money making opportunity for all that are on their toes and taking advantage of it. Aggravating at times for longs ... but in the end, it's the longs who will be smiling the largest. Because, eventually, this charade is going to come to an end