Author Topic: FNMA and FMCC preferreds. In search of the elusive 10 bagger.  (Read 3435092 times)

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12340 on: May 11, 2019, 05:32:02 AM »
During AB interview he said sept/oct to amend spsa (stop nws), then in fox interview he reiterated that would be completed by the fall. there is nothing inconsistent with those comments. His first half of 2020 comment was regarding an IPO which makes sense timeline wise. I know reading comprehension is hard but this is basic stuff

"Calabria = Mnuchin 2.0 .  Lots of excuses as if Calabria has been sleeping for last 10 years when he was the architect of HERA.

Bullshit. He first says October, November, then says first half of 2020.  Will keep moving the goalpost. He is ready to make another excuse of elections and into 2021 (Mnuchin had an excuse of Tax Reform and one excuse after other. Jan 6th is long gone, Otting didn't live up to his promise either. Just talk).

They need the money.  Period.   

If they see they are losing elections, they will wrap it up in first half of 2020. If not, they will not release it for another 4 years. Politics at its worst. Donít fall for it. The possibility of them losing elections is the best chance for GSE shareholders to get their money back as they will quickly release them on their way out "


cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12341 on: May 11, 2019, 06:09:27 AM »
During AB interview he said sept/oct to amend spsa (stop nws), then in fox interview he reiterated that would be completed by the fall. there is nothing inconsistent with those comments. His first half of 2020 comment was regarding an IPO which makes sense timeline wise. I know reading comprehension is hard but this is basic stuff

"Calabria = Mnuchin 2.0 .  Lots of excuses as if Calabria has been sleeping for last 10 years when he was the architect of HERA.

Bullshit. He first says October, November, then says first half of 2020.  Will keep moving the goalpost. He is ready to make another excuse of elections and into 2021 (Mnuchin had an excuse of Tax Reform and one excuse after other. Jan 6th is long gone, Otting didn't live up to his promise either. Just talk).

They need the money.  Period.   

If they see they are losing elections, they will wrap it up in first half of 2020. If not, they will not release it for another 4 years. Politics at its worst. Donít fall for it. The possibility of them losing elections is the best chance for GSE shareholders to get their money back as they will quickly release them on their way out "

I just dont know why calabria is saying all of this stuff, unless the treasury plan is complete and investment bankers have been consulted.

allnatural

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12342 on: May 11, 2019, 06:45:25 AM »
As Otting said (speaking on behalf of FHFA at the time), admin already has a plan determined and everyone is on board. I believe Calabrias recent media appearances were purposefully done, as another commentor mentioned, to start getting the market comfortable with the plan and reduce shock and awe when formally announced.

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12343 on: May 11, 2019, 07:23:00 AM »
During AB interview he said sept/oct to amend spsa (stop nws), then in fox interview he reiterated that would be completed by the fall. there is nothing inconsistent with those comments. His first half of 2020 comment was regarding an IPO which makes sense timeline wise. I know reading comprehension is hard but this is basic stuff

"Calabria = Mnuchin 2.0 .  Lots of excuses as if Calabria has been sleeping for last 10 years when he was the architect of HERA.

Bullshit. He first says October, November, then says first half of 2020.  Will keep moving the goalpost. He is ready to make another excuse of elections and into 2021 (Mnuchin had an excuse of Tax Reform and one excuse after other. Jan 6th is long gone, Otting didn't live up to his promise either. Just talk).

They need the money.  Period.   

If they see they are losing elections, they will wrap it up in first half of 2020. If not, they will not release it for another 4 years. Politics at its worst. Donít fall for it. The possibility of them losing elections is the best chance for GSE shareholders to get their money back as they will quickly release them on their way out "

I just dont know why calabria is saying all of this stuff, unless the treasury plan is complete and investment bankers have been consulted.

Everything has been pre-planned and agreed.  Going through motions.  Amendment to the contract has to be "negotiated" (Calabria has purposely used this word over and over again to signal independence).  I believe he takes his job as regulator seriously but at the same time has everything mapped out w Tsy - there guys aren't idiots and they're not risking their names w/ sloppy execution.  Everything's mapped out and they are going through the motions (incremental info to slowly get the market comfortable - boil the frog munger analogy).

This is telling by the fact that in parts  of the interview he claims he's barely talked to tsy and needs to arm length negotiate, yet in other parts he's confidently discussing a solidified plan (recap without congress w/ dates).

The notion that they are just stepping into the public and winging these statements is just simply not the case. 

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12344 on: May 11, 2019, 09:22:04 AM »
"Calabria = Mnuchin 2.0 .  Lots of excuses as if Calabria has been sleeping for last 10 years when he was the architect of HERA.

Bullshit. He first says October, November, then says first half of 2020.  Will keep moving the goalpost. He is ready to make another excuse of elections and into 2021 (Mnuchin had an excuse of Tax Reform and one excuse after other. Jan 6th is long gone, Otting didn't live up to his promise either. Just talk).

They need the money.  Period.   

If they see they are losing elections, they will wrap it up in first half of 2020. If not, they will not release it for another 4 years. Politics at its worst. Donít fall for it. The possibility of them losing elections is the best chance for GSE shareholders to get their money back as they will quickly release them on their way out "
I agree with everybody else. Pre-planned, motions... as per Snarky. Otting's Jan leak was telling.

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12345 on: May 11, 2019, 03:16:44 PM »
The largest IPO ever, Alibaba, raised 25 billion. More recently, Uber raised 8 billion. How in the world will the government raise 100 billion here (4 Alibabas)? Or even 50 billion? While I agree things are moving along, it is disconcerting that the sweep hasn't been stopped on Calabria's day 1.

SnarkyPuppy

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12346 on: May 11, 2019, 05:59:42 PM »
The largest IPO ever, Alibaba, raised 25 billion. More recently, Uber raised 8 billion. How in the world will the government raise 100 billion here (4 Alibabas)? Or even 50 billion? While I agree things are moving along, it is disconcerting that the sweep hasn't been stopped on Calabria's day 1.

Did you not hear his 25min interview?

rros

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12347 on: May 12, 2019, 12:01:59 PM »
The largest IPO ever, Alibaba, raised 25 billion. More recently, Uber raised 8 billion. How in the world will the government raise 100 billion here (4 Alibabas)? Or even 50 billion? While I agree things are moving along, it is disconcerting that the sweep hasn't been stopped on Calabria's day 1.

Did you not hear his 25min interview?
I did.

The interview raises questions. Not showing any sense of urgency upon the task at hand, believing investors will easily fund a secondary is disconcerting. The idea of achieving the capital levels he requires -in such short period of time- is incompatible with his admission that the sweep will go on for another quarter or two. FB, one of the most marketed IPOs in US history, raised 16 billion. That was for a company with growth prospects in a growing industry, as opposed to Fannie and Freddie's prospect of shrinking market share. Retaining earnings asap is imperative.

There is a profound disconnect with reality when he dismisses lawsuits to the NWS as trivial, something that will go away. This, in the face of a monumental need for raising capital. With no strong commitment to the rule of law facing possibly the largest need for capital ever for 2 US companies, something doesn't click.

It's ok to be opaque while going through the motions. But there is a difference between being opaque and not connecting with reality.

investorG

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12348 on: May 12, 2019, 02:49:21 PM »
the current decision-makers at Tsy and FHFA appear to want lower FnF share and profits over time.

if the capital requirement is ~2.5pct of total assets, that translates into ~ 125bn of capital needed.  some of this amount could come from retained earnings / additional preferred issuances, taking the theoretical amount to be raised in common stock below $100bn.   Ideally, this could be accomplished in a series of transactions, perhaps totalling 3 over 18 months - private equity infusion, re-IPO, follow-on.

ironically, the goals of releasing FnF from conservatorship and maximizing the govt's current investment appear contradictory.  in a potential deal, the more the govt receives of the pro forma value of FnF end state, the less new investors would get for their $75-100bn commitment, making it more difficult to complete a capital raise.  and vice versa.   

thus, I'm guessing calabria is not incentivized to get the common stock price juicing higher in advance of any potential capital raisings.  the moelis govt windfall amount estimates and pro forma FnF valuations are likely well too high in light of the leaders' stated goals.

good luck everyone.

cherzeca

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Re: FNMA and FMCC preferreds. In search of the elusive 10 bagger.
« Reply #12349 on: May 12, 2019, 06:49:41 PM »
the current decision-makers at Tsy and FHFA appear to want lower FnF share and profits over time.

if the capital requirement is ~2.5pct of total assets, that translates into ~ 125bn of capital needed.  some of this amount could come from retained earnings / additional preferred issuances, taking the theoretical amount to be raised in common stock below $100bn.   Ideally, this could be accomplished in a series of transactions, perhaps totalling 3 over 18 months - private equity infusion, re-IPO, follow-on.

ironically, the goals of releasing FnF from conservatorship and maximizing the govt's current investment appear contradictory.  in a potential deal, the more the govt receives of the pro forma value of FnF end state, the less new investors would get for their $75-100bn commitment, making it more difficult to complete a capital raise.  and vice versa.   

thus, I'm guessing calabria is not incentivized to get the common stock price juicing higher in advance of any potential capital raisings.  the moelis govt windfall amount estimates and pro forma FnF valuations are likely well too high in light of the leaders' stated goals.

good luck everyone.

let's not forget that IF the NWS is to be rolled back so that treasury ends up with receipts as per original deal, there is a $25B credit due GSEs...can be in form of a credit against future taxes.  calabria should be pounding the table for this initial $25B stake in negotiations with treasury, and if he doesn't, shareholders should in demanding this in exchange for settlement.  $25B is 20% there towards capital target