Fannie Mae (FNMA)

[kthomp19]

Maybe Bill Ackman believes, as I Have said for ages, that both classes of shares are likely to have value soon, and maybe he covets the restored divvies. Maybe, too, he believes in spreading risk across multiple outcomes to be a multi-part winner.

Or maybe the truth is exactly what he said in his letter.

(2) it hedges our risk of a restructuring that disproportionately benefits the preferred versus the common share

He fears this enough to have bought prefs to make 38% of his portfolio. Obviously what he fears is much worse for the commons than Moelis. He's had some big wins and big losses, but he's generally pretty smart. What is he seeing that you aren't?

I find the premise of an "all at once" done deal remote

Put it this way:

1) FHFA (the job of a conservator is not done until FnF meet all regulatory capital standards, by Calabria's own words) and Treasury (to minimize taxpayer risk) each have rock-solid reasons to not release FnF before they are fully recapped.
2) Those who will provide the money for a recap will want certainty about their investment, i.e. release first.

The only way to square that circle is to have it be simultaneous.