Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3431147 times)

orthopa

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13730 on: September 11, 2019, 12:07:54 PM »
"Calabria today said he's "extremely hopeful" the net worth sweep will be gone by the end of the year, then "we’re probably going to have to have approximately a year of building retained earnings” before Fannie and Freddie can raise outside capital."

At that point fannie would have over $30b in capital if 10pct moment stands.
They'll likely not be critically under capitalised at that point and probably listed on the nyse.

Where was that from today?


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13731 on: September 11, 2019, 12:10:31 PM »
I'd have to verify this when the transcript or recorded call is posted.  Might be the case where he left the word "if" off the front of the quote or something like that.

https://twitter.com/HoldenWalker99/status/1171856144828178432
.@_InvestorsUnite CC w/ @timpagliara & Collins Ps attorney David Thompson, Q&A: "there's going to be a settlement... we want to do something consistent with the Treasury plan," better to do it now than in a year $FNMA $FMCC


this was not said in so many words.  David would never say there is going to be a settlement. I do believe David believes there will be a settlement.  he mentioned that Calabria is on a 15 month shot clock since a new potus can remove him (or so he expects scotus to affirm whether in this case or another), and the APA holding is very strong and unlikely to be reversed by scotus

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13732 on: September 11, 2019, 12:12:36 PM »
I'd have to verify this when the transcript or recorded call is posted.  Might be the case where he left the word "if" off the front of the quote or something like that.

https://twitter.com/HoldenWalker99/status/1171856144828178432
.@_InvestorsUnite CC w/ @timpagliara & Collins Ps attorney David Thompson, Q&A: "there's going to be a settlement... we want to do something consistent with the Treasury plan," better to do it now than in a year $FNMA $FMCC


this was not said in so many words.  David would never say there is going to be a settlement. I do believe David believes there will be a settlement.  he mentioned that Calabria is on a 15 month shot clock since a new potus can remove him (or so he expects scotus to affirm whether in this case or another), and the APA holding is very strong and unlikely to be reversed by scotus

Yeah, I didn't think so.  Thanks for responding.
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DRValue

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13733 on: September 11, 2019, 12:13:52 PM »
"Calabria today said he's "extremely hopeful" the net worth sweep will be gone by the end of the year, then "we’re probably going to have to have approximately a year of building retained earnings” before Fannie and Freddie can raise outside capital."

At that point fannie would have over $30b in capital if 10pct moment stands.
They'll likely not be critically under capitalised at that point and probably listed on the nyse.

Where was that from today?

https://mobile.twitter.com/KatyODonnell_/status/1171833481887977475
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Midas79

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13734 on: September 11, 2019, 12:29:11 PM »
At that point fannie would have over $30b in capital if 10pct moment stands.
They'll likely not be critically under capitalised at that point and probably listed on the nyse.

They would only have that capital if Treasury actually gives it to FnF in cash. Thompson said that his preference is to have Treasury keep the cash and issue a tax credit.

I'm not sure what the relisting requirements are, but I would expect it to happen alongside or just before the SPO.

Luke 5:32

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13735 on: September 11, 2019, 12:34:00 PM »
I'd have to verify this when the transcript or recorded call is posted.  Might be the case where he left the word "if" off the front of the quote or something like that.

https://twitter.com/HoldenWalker99/status/1171856144828178432
.@_InvestorsUnite CC w/ @timpagliara & Collins Ps attorney David Thompson, Q&A: "there's going to be a settlement... we want to do something consistent with the Treasury plan," better to do it now than in a year $FNMA $FMCC


https://twitter.com/HoldenWalker99/status/1171868393886167042
Quote was right, but I may have inadvertently omitted "if" leading up to it.
Take 4 minutes and listen to it. "Stars" by Skillet: https://www.youtube.com/watch?v=TbLJyjfyACM

james22

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13736 on: September 11, 2019, 12:35:47 PM »
I know this may sound naive but there is no way we lose from this price at least on the preferred. I personally believe all of the possible scenarios are unlikely to begin with and the recap is pushed on as a result anyway.  think if you buy at 100% of par you could lose from that level but from these levels no way.

I'd thought to cap my bet at 10%, but the preferred risk/reward seems very attractive.

Just bumped to 15%.

Now 4:1 preferred to common.
BRK, BAM l SV, EM l Fannie Mae, Freddie Mac l Stable Value, Cash Value

onyx1

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13737 on: September 11, 2019, 12:55:17 PM »
I'd have to verify this when the transcript or recorded call is posted.  Might be the case where he left the word "if" off the front of the quote or something like that.

https://twitter.com/HoldenWalker99/status/1171856144828178432
.@_InvestorsUnite CC w/ @timpagliara & Collins Ps attorney David Thompson, Q&A: "there's going to be a settlement... we want to do something consistent with the Treasury plan," better to do it now than in a year $FNMA $FMCC


this was not said in so many words.  David would never say there is going to be a settlement. I do believe David believes there will be a settlement.  he mentioned that Calabria is on a 15 month shot clock since a new potus can remove him (or so he expects scotus to affirm whether in this case or another), and the APA holding is very strong and unlikely to be reversed by scotus

Thompson thinks the government has a lot of reasons to settle soon due to significant litigation risk.

(1) FHFA removal threat sets up a “15 month shot clock”

plus

(2) Fairholme case with a claim for breach of implied covenant of good faith which is a liability that is owed by the GSE’s (not the government).  Thompson believes that raising capital for the GSE’s would be “basically impossible” with potential for lawsuit damages that could cost new investors “tens of billions”.

If he is right, I see the Jr. preferred gaining more from this scenario than the common.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13738 on: September 11, 2019, 01:02:30 PM »
couple of pro tip legal points David mentioned:

1. collins APA holding improves fairholme illegal exaction claim.  so the prospect of damages payable to shareholders has improved....net net, another bargaining chip.

2. scotus normally accepts cert on final judgments. collins was not a final judgment, just a remand for district court to issue a final judgment in accordance with the law set forth in collins.  ie figure out what the proper remedy is.  so there is a possibility that scotus does not grant cert even though there is a circuit split.
« Last Edit: September 11, 2019, 03:47:24 PM by cherzeca »

james22

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #13739 on: September 11, 2019, 02:14:22 PM »
Former hedge fund manager Whitney Tilson said this week the court ruling is a major step in the right direction for Fannie and Freddie investors and has applied significant pressure to the Treasury. Tilson originally recommended Fannie Mae shares to his newsletter subscribers last Thursday, but recommended they take only a 1.5% stake.

Tilson said Fannie Mae shares should be up 50% following Mnuchin’s comments.

“It's clear that investors don't yet fully appreciate the implications of this ruling. That's why today, we recommend buying the second half of the position, making it a 3% holding,” Tilson wrote Tuesday.


https://www.benzinga.com/analyst-ratings/analyst-color/19/09/14415875/analyst-raises-fannie-mae-price-target-following-mnuchin-comments?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+benzinga%2Fanalyst-ratings+%28Channels+-+Analyst+Ratings%29
BRK, BAM l SV, EM l Fannie Mae, Freddie Mac l Stable Value, Cash Value