I don’t think I’m alone here when I say we’re all still waiting for Jimmy Cayne’s sage counsel on how to save FNM and FRE, but, in the meantime, here are Pershing Square manager Bill Ackman’s recommendations. Seemingly missing from the plan is a part for David Blaine, but we assume it was left out in order to preserve the element of surprise.
How to Save Fannie and Freddie [Pershing Square, PDF]
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“Jimmy Cayne”
… Stopped reading right there.
Is this a joke?
He is massively short the stock and he has the balls to tell the Treasury and the Fed how to extinguish the equity out of Fannie & Freddie? And we’re taking him seriously?
Boy this takes short selling to a whole new level.
But you’ve got to respect the man’s guts.
PS: Look at the disaster he’s holding on to called Sears Holding before you get a sense of his intellect.
@10:28– sears holding– lampert.
so when that $2.3T in assets turns out to be worth $0.90, the new equity is wiped out. therefore, the government (taxpayer) bails them out at 4-5x the cost of Bear.
http://www.monkeybusinessblog.com/mbb_weblog/2008/07/bill-ackman-our.html
lol @ “extinguish” equity.
these people are sociopaths.
I believe Pershing is “Target”, not “Sears”
@10:28 – did you not see his treatise on mbia? the guy is known for this type of tactic. fnm and fre are both going to zero. sell the stock buy the puts.
According to Factset, 20% of Pershing’s portfolio was SHLD and another 17% Sears Canada. So, the prior comment re: Ackman and Sears was correct.
@10:34 – just saw the clip, LOL! pure comic gold…
yes, 10:34, cluzo: Seth MacFarlane is a funny guy.
–the forehead slaptress
@ 10:54
You’re saying he has almost 40% of his portfolio tied up on Sears? Maybe in ONE of the funds, but not gross. he does have a pretty damn big Target bet though…
Wouldn’t surprise me. The numbers I saw had Ackman down 19% YTD.
-19% = redemptions.
and lots of ‘em.
11:21- Yep, and there are a lot bigger names doing even worse this year.
hi 11:25am
hedge fund limited partners are about as loyal as a stripper girlfriend.
But she said she loved me!
10:28,
Wow you’re quite baller man. Way to go to figure out that Ackman is as stupid as ESL. Perhaps even more stupid since he blindly followed ESLampert.
But that was quite baller of you to figure that out. Way to go man.
Ok guys, since ya’ll clearly don’t know what you’re talking about (someone call the SEC for rumor mongering) I might as well set the record straight.
PSQ IV is his TGT SPV. It holds only TGT. At the launch he had 67m in swaps/options and shares. Also, -19% DOES NOT equal redemptions when your money is tied up for three years (as it is in psq iv).
SEARF (scc.to) (sears canada) is in his main fund. That trade is about 18 months old. The thesis here was that ESL was going to come in and buy sears canada. When they tried to play hardball and the deal fell through the stock plunged; pershing added to their position.
SHLD is in his main fund.
Thanks for playing.
hi onetwo,
my experience is that gp lockups never hold up when lp’s sick their 600 per hour lawyers on you.
but. what. do. i. know?
not much.
@1:31 – do you honestly not think that Bill Ackman DOESNT have $800/hr lawyers to crush an LP’s $600/hr.
Bill’s lawyers have much nicer suits, too.
isn’t LUK the only investor in PSQ IV, or something fucked up like that…
Not to be a dick, because you raised a good point, but tust me. I know PSQ well. Their legal docs are rock solid, and, besides, most of their investors will happily take the recent underperformance in stride. The guy has made investors a lot of money over the years and investors are more afraid of getting shut out and not being able to get back in than getting out “too late”.
Also, it costs the LPs money to hire the lawyers too! It’s not like the LPs aren’t worried about their own lawyer fees eating away at their capital. With Bill bringing in 80m p.a. on mgt fee alone I’m pretty sure he’s ok to fight a couple LPs if he needed to.
Anyways, read any study on prospecting theory–people always hold their losers too long hoping they’ll snap back. Luckily, with Ackman, they actually stand a chance of doing so.
And yes, it’s ALWAYS about the money money money…money.
fair enough.
;-)
1:52 guest – In a word, no. LUK put up 200 mill, which was 10% of the fund. On 12/31, that was worth $114.5 mill (and TGT’s price was $50 vs. today’s close of $43.68).