One member from Seeking Alpha put a very interesting comment on GSE Preferreds and commons,
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Without a doubt, preferred. Three factors that will have a negative impact on common shares regardless of how the GSEs are reformed:
1) Dilution for equity raise
2) Dilution for warrants
3) Dilution for preferred share conversion
In addition to this dilution risk, which some estimate would leave existing common shareholders with ~2% of the reformed companies, potential competition from new entrants and reduced retained portfolios will reduce GSE profits and value.
Add bargaining power of preferred shareholders with so many pending court cases.
Best case for common, among real reform plans, is ~$10/share. Similar returns for preferred shares but much less risky and much more likely.
