Federal Home Loan Mortgage Corporation (QB) (FMCCO)

Hi Neo, - I dont think I missed the point - we both are making a LOT of assumptions and you most important assumption is that common shareholders will not suffer dilution of any type - warrants - SPS - JPS Conversion. You get a valuation of $ 221 a share for FNMA and an implied valuation of FMCC of around $300 per share ( assuming the same 16 PE).
I am expecting 90% dilution and you are expecting 0% dilution - my guestimate is FNMA in the $ 25 range and FMCC in the $ 35 range.
Lets see has it most correct in the end? Hopefully we will get the ERCF relief soon and then see how the Fairholme/Lamberth Decision works out and refine our estimates after that.

You CLEARLY missed the point of that valuation illustration. That would be the values absent conservatorship, NO DILUTION, and NO egregious capital standards, or under the condition they already meet their full required capital - give or take a slightly different multiple based on the actual specifics of each company and the prevailing market conditions. This is the method used under normal market circumstances. Furthermore, this is NOT "my" methodology; it IS THE METHODOLOGY OF FINANCIAL ANALYSTS marketwide since for time immemorial (at least for mature stocks which F2 are). You just seem simply too incapable of understanding the financial, valuation, and market nuances underlying the simple mathematcis of these valuation methodologies to have a clear discussion. Or, as it seems clearly to me, you are married to an outcome that you want to continue defending for your own intellectual pride. ALL valuation has to have a solid basis in the actual earnings that can be paid to an investor and other associated market realities.

The illustration was meant to show how much room there is for the government to make money, as well as shareholders without all of the many complicating factors (legal, political, logistical, and administrative, significant financial discount incentive to investors, JPS conversion complications) that go along with executing the full warrants. Dilute each company 5, 10, or 15% and redo the calc to get a more realistic value of what each shareholder would make under the conditions of that dilution. But those prices would only be reached under the condition of proper ECRF capital requirement, being fully capitalized, and the government COMPLETELY relinquishing ALL OTHER CLAIMS.

Each of those other calcuations would give a fair estimate under the conditions mentioned above for each equity price and still make the jps full stated value.

Thanks Neo - based on your methodology - For FMCC - can I assume $12.5 bn in earnings divided by 650 million shares with a 16 multiple - about $ 307 per share? Hope you are right!!! - $ 307 on common and $ 25 on JPS!! - best possible outcome. I am basically assuming common will be 10% of your number- in the $ 30 range- which is interesting since I am assuming common will end up with 10% of the equity rather than your assumption of 110%.

Trillion, 10X, tired of winning ?

@DNIPulte

If you release the files regarding @FannieMae & @FreddieMac that @POTUS44 is hiding behind EXECUTIVE PRIVILEGE, I'll stop calling you TOO LATE & DO NOTHING. https://t.co/vzINtEFrUr— Guido da Costa Pereira (@GuidoPerei) July 1, 2026

To answer your question, I don't know. It wouldn't surprise me because of the POOR performance all that money bought by the plaintiffs! They got screwed, for sure.

One can never underestimate the government's capacity (and their corporate welfare recipients) for greed, hubris, or market disrupting action; however, I believe there is a zero percent chance that the warrants are executed in full mainly due to two things:

1. It creates a de facto takings, all the courts know it and would have no constitutional basis on which to deny it
- winning it and how much can be won are beside the point; it creates a justiciable event that RISKS tying up GSEs/housing beyond any administration's ability to control their full use for more time than they likely see as comfortable

2. the logistics and financial realities associated with trying to sell the massive amount of shares into a market that realizes the entities they will buy into are massively diluted, have very low capacity for paying dividends, are still for all practical purposes under government control with NO real prospects of the kind of growth required to compete in the market for other investments - this requires a 20-30-50% discount to entice investors to buy those shares ... they would be trying to sell more than four times as many shares as they sold in AIG which took 6 different rounds to sell over nearly a two year period. Finally, the proceeds will do NOTHING to move the needle on a single year budget deficit and certainly less than NOTHING, ZERO, NADA with regard to the national deficit. Also, a takings case could force them to give up a significant portion of the proceeds.

Full execution of the warrants, in my opinion, has no chance of any real financial feasibility or success, but as I said, it's not that foolish bureaucrats will not attempt it, but there must be at least one adult in the room with solid financial reality experience.

For Fannie, at an average of roughly $16B dollars in net earnings over the past 10 years with current shares of 1.158B and a financial industry multiplier average of players in their class of 16 we have an undiluted share price of:

[$16B/1.158B] x16 = $221/share

Again, this is TOTALLY UNDILUTED no warrant or sps dilution, and JUST FOR FANNIE. Think about adding Freddie into the mix. This clearly shows there is plenty of room for both the government to make some money and shareholders to be richly and justly reward without having to fully execute those warrants (or cramdown from SPS). This is further supported and even magnified by a proper risk-based ECRF cap requirements commensurate with the GSEs line of business.

In my opinion there is no reason other than greed (government or other industry players), or power hungry control freaks that we cannot see the junior preferred receive full stated value and both equities return to their pre-c'ship levels almost immediately after the solution is defined and put into motion with both sets of securities rising all along the way to those values.

It seems certain they are waiting on the appeals decision (although this is only faux-necessary) the numbers at stake are less than one percent of the GSE's net worth in total. But some kind of remand to lower courts for additional damages could be the decisive factor in the government being prodded to move quickly to the solution that delivers the outcome I speak of above.

But the ugly caveat is that Trump digs in when he feels forced, the other industry players as well. There is a risk they ALL dig in, especially if there is a remand to the lower courts for further damages - they might just let that playout or even appeal to SCOTUS. In that case we could take another two years. An ugly thought indeed.

the wider swing on relatively lower volume are clear indications of an at least temporary short supply of available shares ... which may indicate a general belief something changing the outlook landscape ... word of proposal to change ECRF; end of quarter news from the companies coming; word of the appeals decision = these are the most proximate events

I do NOT think we will hear ANYTHING substantive on these for at least a full month, but holding tight for a month is certainly smart with the aforementioned events on the horizon ...

Declassify whatever you want: 🚨 JUST IN: President Trump has told Acting Director of National Intelligence Bill Pulte to DECLASSIFY anything he wants

🔥🔥🔥

"Bill Pulte is there, I said, 'you can declassify WHATEVER YOU WANT!'"

"I told him — you can do it as fast [as possible]!"

"I think Bill will… pic.twitter.com/3nwo4FX8Xi— Eric Daugherty (@EricLDaugh) July 1, 2026

Symbol
FMCC
Pre-Market
$6.15
+$0.17 (+2.76%) Time (ET)
08:05:20 AM

Germany lost 16 cents ! Trumps game is ova !

Birth Right Citizenship Amendment first, then Fannie and Freddie.

Just kidding. I sincerely hope the First Family is busy buying FNMA & FMCC. Otherwise, I fear it won't get done because of that damn James Watt. Still kidding. DO NOTHINGS always have excuses. But, I don't think Watt can be blamed this time.

Yes - that would be great for me and that is why I own commons. I have thought it was clear cut that commons would do much better but the price action does give me concern.
A big determinant will be any changes in the ERCF Reg Capital requirements and of course a SPS Conversion.
I would love to see FMCC in the $ 60 range and JPS paid at Stated Value - however just thinking about what John Paulson may want and he may convince Trump to sweeten the pot for JPS and that is why I also own JPS.

Thanks for the reply Neo

I am assuming a $ 500 bn valuation based on $ 25 bn in annual earnings just to start - Bessent has said he thought F2 was in that range. Just keeping it simple since this is all speculation as you suggest.
- Next, I am assuming the SPS gets written down to the original $ 1 bn each and not making any extra dilution adjustments but just holding the US Treasury stake constant at 80% ( I know it is 79.9 but just to simplify)
-Next, I assume the UST does not exercise any warrants until the balance sheet is finalized and I am assuming all FNMA and FMCC need is the addition of the JPS Equity converted to CET1 Common.
-Just to simplify and assuming Trump looks at this in basic terms - the common should have a greater price increase than the JPS but basically both groups of shareholders got screwed so basically back into a scenario where the UST owns 80% and protects itself by the timing of the exercise of the warrants and the Common and JPS split the remaining 20%.
-So - going back to the $ 500 bn F2 valuation - split the estimated MV 275 FNMA and 225 FMCC - just ball park but maybe elegantly simple
- Next I am assuming that after the Fairholme Decision there will be some negotiation where the JPS will negotiate favorable conversion rights
based on relative trading prices on a Series by Series basis or on Stated Value. Something like 250 trading day averages will be used.
- I assumed that another 650 million shares would be issued to the JPS and Common would retain 650 million shares - Treasury holds warrants with dilution protection until they exercise.
- 225 bn total MV - Common $ 22.5 bn - JPS $ 22.5 bn total with an additional 650 million shares issued.
- Your calculation is correct but I am now assuming that 1.3 bn will be held for 20% of the equity which equates to the doubling of fully diluted shares outstanding 1.3 bn common/JPS /.2 = 6.5 proforma fully diluted. $ 225/6.5 = $ 34.61 which is half of what the calculation would be based on current fully diluted shares.
- Very simple calculation based on the 50/50 principle and provides common with generally a 5X outcome and JPS a 4X outcome at current prices. Trump and Pulte have no reason to like Common shareholders based off consistent "nasty" comments and we know Paulson and some other JPS shareholders are loyal supporters. Hoping Ackman keeps it at least 50/50
- Just foolish speculation of course but elegantly simple with a semblance of fairness dont your think?

You mix match and conflate too many things to make any real logical sense with your thesis in general or your numbers in particular. Paragraphs are best devoted to explanation with the mathematics and financials clearly shown and supported separately with some actual historical data and financial or valuation calcuations.

Now, mind you, I know that you ARE intelligent. What I am knocking is your presentation and the inability to clearly support these vast generalizations about market cap, stock prices, etc.

Let's start here: All of your 80% this, 10% that, and another 10% here premise to this:
This would imply a potential FMCC price of approx $34 per share ( $ 22.5 bn/650 million shares) and would imply F2 would be worth approx $ 500 bn combined.
is just speculation, guesswork, we're all guessing, but it is guessing just the same and not really relevant, in fact, not supportive of the quoted statement.

Explain to me where you get the $22.5 bn and 650 million shares for FMCC (I know this is the current number of shares). In the past 12 years the highest net earnings figure for Freddie was $16.83 bn, seven of those years have been below $12 bn, and all other years have been in between. These are NOT guesses; they are actual reported figures, and there are no calculations in this explanation. It is just refuation of the use of $22.5 bn for the Freddie calc you make. They did have one $25 bn outlier in the past 15 years, as well as one almost $6 bn loss. Those should not be considered, anyway they are outside of the past 12 years.

Those figures are easy to find, add, and divide by 12 to get the average over the past 12 years, which would be the most sensible figure to use (=$11.995 bn). Finally, you use 650 million shares, but after full execution of the warrants that figure becomes:

[650 milliion]/(1 - .799) = 650/.201 = 3.233 BILLION SHARES.

So, just for starters, I do not understand the basis of your line: $34 per share ($22.5/650 million shares). I could be missing something, if so, point it out to me.

There could be some settlement for sure. Probably 5years of pref dividend and made full to the face value. That will be like a one time $12.50 dividend and appreciation to $25 face value.  Even so, commons will do so much better

"SCOTUS said in closing that you brought the WRONG CASE ! How does a top law firm bring the wrong case to SCOTUS. They explained it to them as well !"

As I said previously, you think you're getting $1000/hr. lawyers when in reality, you got 50¢/hour lawyers. You know, the one that got their Harvard degrees oit of a Cracker Jacks box. Shareholders needed Morgan & Morgan!

Hi Nats,

Regarding the JPS - I am thinking that there will be some type of exchange offer because (1) Paulson is still a very loyal friend and supporter and we have to think Trump will be fair or more than fair to JPS as he will be to John PaulSon(2) FMCC in particular needs CET1 ERCF Capital - even to pay dividends at all. FNMA less so and (3) my assumption is that Trump has not uplisted by now for a reason since he needs to uplist to even get close to $ 500 bn in value - so why not uplist? Maybe an exchange offer based on average trading prices?.

Yes my working assumption is $ 22.5/$ 13.9 because (1) it is a relative risk/reward 5X on common and 4X on JPS and (2) there has to be an incentive for JPS to convert.

JPS has been screwed as much as or more than common and have much nicer/civil shareholders - Pulte definitely has noticed and maybe Trump has also.

"to EVER be valued at $1 trillion"

Just more of Trump running his mouth about something he knows very little, if anything.

Same ole BS with the stock price. I wonder if, when, and why it all ends ehh

Like Hannity stated true journalism is gone!

We need Charles Payne to lay out the extent of the crime, make the public aware of how massive this Takings is. Sadly, he won't do it because like Maria the syndicate will cut them off, no more interviews, no more cash.

You raise a very good point. The lawyer may have been a plant. A case as blatant as this should have breezed through the court. If this is not a Takings there is no such thing.

We need a Wink from Charles Payne, Lmao !

just a fool's opinion which I am sure you will agree

FOFreddie - On the contrary, this is a very logical, well thought out possibility. Is it likely? Hard to tell as there is a universe of outcomes for this. But if I were handing out percentages of likelihood - this would be up there. There is no way that Trump is not exercising the warrants. But that still leaves a lot on the table if the SPS goes away (more accurate to say is considered paid in full - which it is).
If it plays out like you are proposing it may - wouldn't this be a 50% premium to par for Freddie ($22.5B for $14B) and Fannie JPS ($27.5B for 19B)?

Nats

I still have a theory that the Gov or the Federalists hired a half baked lawyer to present a losing case so the law would end up favouring the Gov. Think about how you can get your (Robbery) made legal so to keep the F-2 locked up forever as a CASH COW for the Gov!

SCOTUS said in closing that you brought the WRONG CASE ! How does a top law firm bring the wrong case to SCOTUS. They explained it to them as well !

It seems very fishy !! And why did SCOTUS take the case when it new it was the wrong case to present ? The only reason was to make law that the NWS was legal by the contract. ! BINGO GO !! GOV gets to keep all the $$$$ they stole !!

Nobody knows housing like Trump as PHM soars ! Can we maintain 1X Mr Ackman ?

Hi Neo,

My assumption is that FMCC will be trading with a market cap of $ 225 billion by the end of 2027. My assumption is that FNMA will trade with a $ 275 bn market cap. I am assuming that legacy common will end up with 10% of the equity and JPS will convert into common for the other 10%. I see no scenario that the UST does not end up with less than an 80% ownership and hopefully I am not too optimistic.
This would imply a potential FMCC price of approx $34 per share ( $ 22.5 bn/650 million shares) and would imply F2 would be worth approx $ 500 bn combined. It would be awesome if Trump is right about valuations reaching $ 1 Trillion because FMCC could be worth more than $ 60 in 2 to 5 years.
You probably totally disagree but I believe you are totally ignoring reality to assume that the UST does not end up with at least 80% of the equity of F2 - of course a SPS conversion could dilute us even more, but I am hopeful that the SPS will be written down. This is just pure speculation on my part, and I am sure you think the analysis is worthless, but this is the reason I own approximately 200k of FMCC and a whole lot of JPS - mostly FMCC.
I know I am a fool for owning F2 since 2008 and staying committed to the idea that it will be worth it. Trump in my opinion is our only hope and I believe those who publicly criticize his and Pulte's handling of F2 are most likely hurting our cause - probably another foolish idea but I have never seen Trump respond favorably to criticism.
Hoping for some good news regarding the ERCF by July 11th.
Of course - just a fool's opinion which I am sure you will agree.

Too Late Pulte got promoted to DO NOTHING Pulte.

He hasn't:

Revised ERCFs for Fannie Mae & Freddie Mac.
Ended CRT fraud.
Up listed them on NYSE.
Ended their TEMPORARY conservatorship.@POTUS @pulte @SecScottBessent @SecretaryTurner @howardlutnick @BillAckman @michaeljburry— Guido da Costa Pereira (@GuidoPerei) June 30, 2026

Temporary Indefinite, Patience, No Rush!

As the current structure of F2 stands and the structure of the market it serves, even with the most favorable prospects of the fintech platform being spun off in the future, their income would have to nearly triple with ZERO dilution, and the market apply Visa and MasterCard level multipliers to EVER be valued at $1 trillion by the market. If the government dilutes them even 25 or 50% the trillion valuation is for all practical purposes impossible. Without dilution the trillion valuation is possible, but far far far beyond the time horizon of the c'ship ending time frame.

And that case you just cited will have almost zero application to the facts, circumstances, and implications of F2s situation on a major industry and shareholder principles in general - especially if it attempts an 80% dilution. And I will layout that case fully on X and get back to you when complete. Continuing to post any argument you can find - especially weak arguments, not necessarily this particular argument, in support of the 80% takings certainly makes me question both your motive and logical reasoning capabilities, this aspect supported by inability to reason through the trillion dollar valuation argument.

Fox news chief congressional correspondent just reported speaker johnson's office has transmitted the housing bill to the president

Takings cases are never easy - just ask the Pungs

https://pacificlegal.org/justice-thomas-says-the-quiet-part-out-loud-in-pung/?utm_source=docket&utm_medium=email&utm_campaign=pung&utm_content=pr

Like it or not - we will have no chance unless Trump acts. Common and JPS will likely share in 20% of the equity and the UST will definitely own 80% via the warrants. There is no other way forward.

My hope is that Trump is right on F2 being worth a Trillion and I look forward to the ride.

Hopefully Trump frees the gse’s long before that happens

Go FnF

Hopefully Trump frees the gse’s long before that happens

Go FnF

many f2 shareholders are 60 plus, I don’t see many of them have a chance to see their compensation from any legal ruling alive , myself have been holding for 19 years but gotten zero from any class actions. It is wasting of time talking about legal cases.

"I believe that had the case been properly presented to the Supreme Court that the terms of the CONservatorship would have been ruled a Takings."

Well, you go out and hire a high-flying law firm to plead your case only to find out it really was a 50¢ law firm. The plaintiffs could have hired the guy who lives under the bridge down by the interstate, received the same results, and would have gotten off with payment of a few square meals. What they should have done was hire a second law firm to sue the first law firm for poor performance and shoddy representation.

the anemic volume tells me the Fitzgerald bill, with its shareholder thievery provisions, has had little to no effect ... anyway, as my X post suggested it has no chance of passage or even much advancement until the next session of Congress in January 2027

How about @FHFA 's $301 billion fraud against Fannie Mae and Freddie Mac? Look in the mirror before accusing others.

FREE FANNIE!
FREE FREDDIE!
MAGA!@POTUS @DNIPulte @SecScottBessent @SecretaryTurner @howardlutnick @RepMeuser @RepYoungKim @BillAckman @michaeljburry https://t.co/9IKWGwjnF9— Guido da Costa Pereira (@GuidoPerei) June 29, 2026

Pulte Homes PHM kicking azz !

Definitely a communist. I wonder if he knows what it means or if he agrees with it.

The Lamberth case was favorable to America in that it pointed out the theft of billions of dollars from Fannie and Freddie. However, this falls short of the much larger issue of Takings as it pertains to the CONservatorship as a whole. The case places the oneness on the government to repay a fraction of what it stole but does not stop the government from stealing more. The case rules the Net Worth Sweep was illegal, but Trump had put an end to the Net Worth Sweep. This leaves the government free to take from the twins and their shareholders through many other means. I believe that had the case been properly presented to the Supreme Court that the terms of the CONservatorship would have been ruled a Takings.

@RepFitzgerald 's bills indicate he's a damn COMMIE! Despite our government already looting $301 billion of Fannie Mae and Freddie Mac equity, he proposes more.@POTUS @pulte @SecScottBessent @SecretaryTurner @howardlutnick @RepMeuser @kim @BillAckman @michaeljburry https://t.co/VeihaWtXRE— Guido da Costa Pereira (@GuidoPerei) June 29, 2026

Patience !

I only trust jog at this point ... you've called it correct all along on these rat bastard thieves

F2 Potential Timeline - not to say anything will happen but hopeful maybes:

July 10th - potential last day for Trump to sign or Veto Housing Bill with possible comments regarding F2 ( assuming Speaker Johnson transmits bill on June 29th to start 10 day clock)
July 11th - 120 time period for FHFA under Trump Regulatory Capital EO
July 21st - 90 days period after Lambert/Fairholme DC Circuit Hearing ( Hoping for 2- 1 Panel Decision from Judge Ginsburg at least upholding Jury Damages award of $ 800 million plus additional interest - possible remand for damages but at least reaffirmation of Jury Verdict Damages)
July 24th - White House Correspondents Dinner - hope for better security at this one.

Probably best not to trust anyone as there is obvious collusion and obstruction of justice thriving with the GSEs. On the shareholder side of things, Burry is just a blow-hard and Ackman has found out that large block holdings exerts no influence with the vile and wicked. I wish we had an author among us because a book is begging to be written.