Fannie, Freddie Stocks are Worth $40 to $50 Said Bill AckmanShares of U.S. mortgage companies Fannie Mae and Freddie Mac might value $40 to $50 just over a month after a U.S. court ruling sent the securities tumbling, according to William Ackman, an American hedge fund manager, and the founder and CEO of Pershing Square Capital Management LP.
Ackman, whose firm oversees $18 billion and is the largest holder of the stocks behind the U.S. government, made the comments at the Invest for Kids Conference in Chicago today.
The New York-based investment firm is wagering that Congress or the courts will restore value to the securities after Fannie Mae and Freddie Mac were seized by regulators in September 2008. Shares in both companies have rallied since last year after Pershing and other hedge funds bought the securities, reaching a value of more than $5 in March. They then slumped after a federal judge threw out a lawsuit on Sept. 30 that would have forced the government to share the companies’ profits with shareholders.
Fannie Mae’s common stock has dropped 17 percent since the end of September to $2.24. Freddie Mac shares are trading at $2.18.
Pershing’s biggest hedge fund gained 0.7 percent in October and 33 percent this year, according to a monthly report.Source: Bloomberg