Picasso

Merry Christmas everyone!

So much for that idea

Whitney Tilson.

MX

It's clearly not authentic.

Amazing

I used cost of equity as these are non cumulative dividends coming from net income. Not that any of this is happening but at least can be compared to other investments this way Goldman has a valuation of $32 for either fmckj or fnmas. I thought investors just misread what Goldman actually said?

But these are $0 strike warrants. Most anti-dilution provisions will reduce the strike or allow for participation in any new equity raise. When you have a $0 strike with no limits on the increase in warrant issuance in front of any equity raise, it makes the equity totally uninvestable. I don't think I've ever seen that before. It's such a great deal for the warrant holders that I can't imagine why they would amend the terms.

that's how i read it too merkhet. i didnt realize that. so if junior pref exchanges for common, for example, the number of govt warrants increases. i agree that govt warrants and common are not parri passu. i have never seen this for a public company. this also makes it impossible to issue more common stock, imo. who wants to pay up for a share of common stock knowing that he is also funding a free .8 share warrant for govt? so if there is to be a recap, this provision has to change, because there is no recap. taking it one step further, no junior pref holder would exchange for common for the same reason, which govt may want to do, so this provision (if used by treasury) makes any kind of workout that restores equity value unworkable. This is amazing, the government actually issued magic warrants. No wonder they did 79.9%, they basically get the benefit of owning the entire business without placing any of its debt on the government balance sheet. It also makes the existing common equity worthless because no capital would ever make its way back to common equity holders except for the ones that own those warrants. I don't have a view on the preferred yet but I can't imagine why anyone would speculate on purchasing the equity with those kinds of warrant rights. It also makes me wonder, with a deal like that why would the government want to make any changes? It's basically 100% ownership even without the NWS. It seems like a bet on Mnuchin not screwing over his buddies and if we're talking about the NWS being un-American, that sounds pretty un-American too.

I'm not sure I follow either. Order of dilution doesn't matter, the warrants will be diluted unless they're magic warrants. And if they're those kind of magic warrants then commons are worth zero.

No position but in agreement with this. It starts getting speculative when you have to read between the lines and analyze tones. If Trump had not won (a seemingly improbable event), I can't imagine these securities would be trading anywhere near current market prices.

Mind explaining to me how you get new private money/investors to recapitalize a company and commit hundreds of billions of dollars while taking the first loss in a new entity when previous shareholders were liquidated? Is this something you would invest in and expect other to do also? Seems like no one has a problem investing in GM these days.

The best part is he wanted to BTFD, not short the stock.

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