Replies to post #789340 on Fannie Mae-No Politics (FNMA)

[LuLeVan]

"If you are short and think the stock is going to 2 cents, you can get margin called if the stock goes up too much in the meantime even if you are right about the eventual destination."

That's what happened to Bill Ackman with his Herbalife short. He got squeezed out and lost a billion dollars, and Icahn won - based on false information. In the end, Herbalife turned out to be a Ponzi scheme and Ackman was right:

https://stockcharts.com/c-sc/sc?s=HLF&p=W&b=5&g=0&i=t6274739623c&r=1711015774469

I hope (for the commons here) that Ackman will finally be right about FnF too. However, he recently bought JPS to hedge against a potential SPS-to-common conversion. So if the worst case szenario ("cramdown") happens, Ackman won't lose his shirt.