On September 6, some inaccurate media reports knocked down the GSE's stocks. Since then, Fannie Mae common shares are up some 50%, and its T Preferred shares (FNMAT) are up 20%.
The trigger was an unexpected reversal of a District Court’s opinion by the 5th Circuit Court of Appeals, which declared FHFA unconstitutionally structured, by a vote of 12 to 4.
On September 19, FNMA was down 7% intraday, but recovered by the close. Preferred shares were flat. It was the same story: a misleading snippet from an otherwise good Bloomberg interview.
On September 13, I argued for an easy double (and then some, depending on the recapitalization terms) in both FNMA and FNMAT. I still do, with the common at $3.95 and preferred T at $13.
My recent article on Fannie drew many high-caliber comments. Based on these, here as some more thoughts to follow up.
Bear in mind that I am not attorney; this is a volatile, multi-event-driven story; and