I actually tend to take Bill Ackman at his word. I took a huge position in Valeant based on a belief in his long term goals for their beleaguered common shares. So I offer that thought merely as rebuttal that I have some retaliatory bias against against Pershing as has been suggested here, previously.
Ackman has been quite forthcoming in acknowledging two basic premises on Fannie Mae commons. He bought shares opportunistically because he thought they were hugely undervalued. And, he bought shares because he believed the GSEs were strong, long term investments. That is a sound investment thesis for someone with the nerve, patience and capital resources to navigate the very evident risk profile AND the likely multi-year rebuilding threshold necessary to hit pay dirt.
Commons traded in the $60 range, just a few years prior to the 2008 crisis. I think this is what Ackman views in a long term hold. He talks about $20 commons as a near term prospect which would deliver very solid returns for his shareholders in Pershing Square. But I believe his eventual target is a LOT closed to that $60 target. When you buy shares for <$1 you can afford to wait things out, even if it takes 15 years.
Preferred shares are capped at par value and may pay out some nice divvies once the GSEs get recapitalized. My FNMAS willnever see a S/P above $25. That is why Ackman prefers common stock.
The part about all the hedgies I dislike is what I view as disingenuous posturing amounting to trying to game the court system to bleed $bazillions from the government for wounds and damages that inevitably are based on coulda/woulda/shoulda-been enrichment. "We caught you doing something illegal, so we are going to bleed you dry in a multi-front legal assault for everything and anything including the kitchen sink." The garbage about "Saving Fannie" and the importance of affordable housing as a motivation to sue is self-serving, sanctimonious bullshit. That's the part I find offensive.
JMHO.
