Fannie, Freddie Stocks are Worth $40 to $50 Said Bill Ackman
Shares 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
