I'm pretty sure they've sold out of Canadian Pacific Kansas based upon their investor presentation a few months ago. Using Grok, I asked it to estimate the potential boost to the NAV of PSH if Fannie Mae and Freddie Mac were floated, and it came up with roughly a 5% boost to NAV.
I reran the calculation as the last time I did it was in May. Results below:
Based on the updated data provided as of August 5, 2025, and incorporating the most recent information from web searches and other sources (including no significant changes to the privatization valuation scenarios since May 2025, though reports indicate potential acceleration of the IPO timeline to late 2025), I've recalculated the estimated impact on Pershing Square Holdings' (PSH) NAV per share if Fannie Mae and Freddie Mac are spun off. The calculations follow the same methodology as the initial May analysis but use the new share prices for Fannie Mae ($9.985) and Freddie Mac ($7.97), updated market caps, and the latest PSH shares outstanding figure.
### Updated Calculations
- **Current Market Caps** (using ~740 million shares outstanding for Fannie Mae and ~650 million for Freddie Mac, consistent with the initial derivation from price and reported combined value):
- **PSH Shares Outstanding**: 178,903,590 (updated from recent reports as of August 2025; this is the number of public shares used for NAV per share calculations).
- **Total Current NAV**: $79.68 × 178,903,590 ≈ **$14.255 billion**.
#### Conservative Scenario ($34 per share post-spin-off for both Fannie Mae and Freddie Mac, per Ackman's estimate)
- Increase in NAV per Share: $0.685 billion ÷ 178,903,590 shares ≈ **$3.83** (or ~£2.88 at the implied exchange rate of ~1.33 USD/GBP derived from the provided NAV figures).
#### Optimistic Scenario ($347 billion combined post-spin-off valuation, split ~58.8%/41.2% between Fannie Mae and Freddie Mac based on updated market cap proportions)
- PSH's holdings represent ~10% of the publicly traded OTC shares in Fannie Mae and ~9.77% in Freddie Mac, equating to an effective post-dilution ownership of ~2% in Fannie Mae and ~1.95% in Freddie Mac after accounting for the U.S. Treasury's warrants for ~80% of common stock.
- Shares outstanding for valuation purposes: ~740 million for Fannie Mae and ~650 million for Freddie Mac (derived from the reported combined market value of ~$12.3 billion and share prices at the time to ensure consistency with the Reuters article).
- Current market caps based on May prices ($9.94 for Fannie Mae, $7.15 for Freddie Mac), with a ~60/40 split for the optimistic scenario.
- Privatization scenarios: Conservative based on Ackman's estimate of ~$34 per share post-IPO (implying a revaluation of current shares); Optimistic based on a $347 billion combined full company valuation at a P/E of 12x 2024 net income (per Thorne's analysis on X).
- PSH shares outstanding: Assumed ~200 million.
- The spin-off leads to the projected valuations without further dilution beyond the existing warrants, no significant recapitalization costs impacting common shareholders, and no major regulatory or market risks materializing (e.g., credit downgrades or higher mortgage rates).
- PSH's total NAV calculated using the provided NAV per share ($77.44 USD / £57.84 GBP at the time).
- Holdings data based on historical 13F filings and Ackman's public statements (no changes assumed since last reported in 2014: 115,569,796 shares of Fannie Mae and 63,503,717 shares of Freddie Mac).
#### Current Assumptions (Updated for August 2025)
- Same holdings percentages and effective ownership as initial (confirmed via historical data and Ackman's ongoing public affirmations; recent 13F filings do not list FNMA/FMCC, likely due to reporting structure, but no evidence of sales).
- Same shares outstanding for Fannie Mae and Freddie Mac as initial for consistency.
- Updated current market caps using August prices ($9.985 for Fannie Mae, $7.97 for Freddie Mac).
- Updated split for optimistic scenario to ~58.8%/41.2% (Fannie Mae/Freddie Mac) based on the new market cap proportions.
- Privatization scenarios unchanged: Conservative remains at ~$34 per share (reaffirmed in recent Ackman statements and presentations from January 2025); Optimistic remains at $347 billion combined (no new contradictory estimates found, though some sources mention potential 10x upside from late-2024 prices, which aligns roughly with the $34 target given price gains since then).
- PSH shares outstanding updated to 178,903,590 (per recent buyback announcements and reports as of August 2025).
- PSH's total NAV calculated using the provided NAV per share ($79.68 USD / £59.92 GBP).
- The spin-off would still lead to the projected valuations, but with potential for earlier timing (late 2025 per recent reports on Trump's plans, possibly raising ~$30 billion for the government), without additional dilution or costs beyond warrants. Risks (e.g., higher mortgage rates or delays) remain, and no other products or events from xAI impact this.
- All estimates are speculative and assume favorable political and market conditions; actual outcomes could vary significantly.
Hi Team, I’d like to add your calculation into the article. It’s incredible that this has been overlooked and is nowhere in the share price. Although the timing isn’t certain the logic, the simple fact that the US Gov’t would want to offload this liability from the government’s balance sheet makes its IPO seem to be a no brainer to me. OB
Sure. In the last week there have been several headlines discussing the government offloading its stake. They have already invited 6 major banks to discuss it as seen here, although if they only sell $30bn worth, it might be an initial stage to test the market and sell in tranches as the UK government did with NatWest:
I'm pretty sure they've sold out of Canadian Pacific Kansas based upon their investor presentation a few months ago. Using Grok, I asked it to estimate the potential boost to the NAV of PSH if Fannie Mae and Freddie Mac were floated, and it came up with roughly a 5% boost to NAV.
I reran the calculation as the last time I did it was in May. Results below:
Based on the updated data provided as of August 5, 2025, and incorporating the most recent information from web searches and other sources (including no significant changes to the privatization valuation scenarios since May 2025, though reports indicate potential acceleration of the IPO timeline to late 2025), I've recalculated the estimated impact on Pershing Square Holdings' (PSH) NAV per share if Fannie Mae and Freddie Mac are spun off. The calculations follow the same methodology as the initial May analysis but use the new share prices for Fannie Mae ($9.985) and Freddie Mac ($7.97), updated market caps, and the latest PSH shares outstanding figure.
### Updated Calculations
- **Current Market Caps** (using ~740 million shares outstanding for Fannie Mae and ~650 million for Freddie Mac, consistent with the initial derivation from price and reported combined value):
- Fannie Mae: 740 million shares × $9.985 = **$7.39 billion**.
- Freddie Mac: 650 million shares × $7.97 = **$5.18 billion**.
- Combined: **$12.57 billion**.
- **PSH's Current Holdings Value** (using effective post-dilution ownership of 2% for Fannie Mae and 1.95% for Freddie Mac):
- Fannie Mae: 2% × $7.39 billion = **$0.148 billion**.
- Freddie Mac: 1.95% × $5.18 billion = **$0.101 billion**.
- Total: **$0.249 billion**.
- **PSH Shares Outstanding**: 178,903,590 (updated from recent reports as of August 2025; this is the number of public shares used for NAV per share calculations).
- **Total Current NAV**: $79.68 × 178,903,590 ≈ **$14.255 billion**.
#### Conservative Scenario ($34 per share post-spin-off for both Fannie Mae and Freddie Mac, per Ackman's estimate)
- Post-Spin-Off Market Caps:
- Fannie Mae: 740 million shares × $34 = **$25.16 billion**.
- Freddie Mac: 650 million shares × $34 = **$22.10 billion**.
- PSH's Post-Spin-Off Holdings Value:
- Fannie Mae: 2% × $25.16 billion = **$0.503 billion**.
- Freddie Mac: 1.95% × $22.10 billion = **$0.431 billion**.
- Total: **$0.934 billion**.
- Gain: $0.934 billion - $0.249 billion = **$0.685 billion**.
- Increase in NAV per Share: $0.685 billion ÷ 178,903,590 shares ≈ **$3.83** (or ~£2.88 at the implied exchange rate of ~1.33 USD/GBP derived from the provided NAV figures).
- Percentage Increase in NAV: ($0.685 billion ÷ $14.255 billion) × 100% ≈ **4.8%**.
#### Optimistic Scenario ($347 billion combined post-spin-off valuation, split ~58.8%/41.2% between Fannie Mae and Freddie Mac based on updated market cap proportions)
- Post-Spin-Off Market Caps:
- Fannie Mae: 58.8% × $347 billion = **$204 billion**.
- Freddie Mac: 41.2% × $347 billion = **$143 billion**.
- PSH's Post-Spin-Off Holdings Value:
- Fannie Mae: 2% × $204 billion = **$4.08 billion**.
- Freddie Mac: 1.95% × $143 billion = **$2.79 billion**.
- Total: **$6.87 billion**.
- Gain: $6.87 billion - $0.249 billion = **$6.62 billion**.
- Increase in NAV per Share: $6.62 billion ÷ 178,903,590 shares ≈ **$37.01** (or ~£27.84 at the implied exchange rate of ~1.33 USD/GBP).
- Percentage Increase in NAV: ($6.62 billion ÷ $14.255 billion) × 100% ≈ **46.5%**.
### Assumptions Used
#### Initial Assumptions (from May 2025 Analysis)
- PSH's holdings represent ~10% of the publicly traded OTC shares in Fannie Mae and ~9.77% in Freddie Mac, equating to an effective post-dilution ownership of ~2% in Fannie Mae and ~1.95% in Freddie Mac after accounting for the U.S. Treasury's warrants for ~80% of common stock.
- Shares outstanding for valuation purposes: ~740 million for Fannie Mae and ~650 million for Freddie Mac (derived from the reported combined market value of ~$12.3 billion and share prices at the time to ensure consistency with the Reuters article).
- Current market caps based on May prices ($9.94 for Fannie Mae, $7.15 for Freddie Mac), with a ~60/40 split for the optimistic scenario.
- Privatization scenarios: Conservative based on Ackman's estimate of ~$34 per share post-IPO (implying a revaluation of current shares); Optimistic based on a $347 billion combined full company valuation at a P/E of 12x 2024 net income (per Thorne's analysis on X).
- PSH shares outstanding: Assumed ~200 million.
- The spin-off leads to the projected valuations without further dilution beyond the existing warrants, no significant recapitalization costs impacting common shareholders, and no major regulatory or market risks materializing (e.g., credit downgrades or higher mortgage rates).
- PSH's total NAV calculated using the provided NAV per share ($77.44 USD / £57.84 GBP at the time).
- Holdings data based on historical 13F filings and Ackman's public statements (no changes assumed since last reported in 2014: 115,569,796 shares of Fannie Mae and 63,503,717 shares of Freddie Mac).
#### Current Assumptions (Updated for August 2025)
- Same holdings percentages and effective ownership as initial (confirmed via historical data and Ackman's ongoing public affirmations; recent 13F filings do not list FNMA/FMCC, likely due to reporting structure, but no evidence of sales).
- Same shares outstanding for Fannie Mae and Freddie Mac as initial for consistency.
- Updated current market caps using August prices ($9.985 for Fannie Mae, $7.97 for Freddie Mac).
- Updated split for optimistic scenario to ~58.8%/41.2% (Fannie Mae/Freddie Mac) based on the new market cap proportions.
- Privatization scenarios unchanged: Conservative remains at ~$34 per share (reaffirmed in recent Ackman statements and presentations from January 2025); Optimistic remains at $347 billion combined (no new contradictory estimates found, though some sources mention potential 10x upside from late-2024 prices, which aligns roughly with the $34 target given price gains since then).
- PSH shares outstanding updated to 178,903,590 (per recent buyback announcements and reports as of August 2025).
- PSH's total NAV calculated using the provided NAV per share ($79.68 USD / £59.92 GBP).
- The spin-off would still lead to the projected valuations, but with potential for earlier timing (late 2025 per recent reports on Trump's plans, possibly raising ~$30 billion for the government), without additional dilution or costs beyond warrants. Risks (e.g., higher mortgage rates or delays) remain, and no other products or events from xAI impact this.
- All estimates are speculative and assume favorable political and market conditions; actual outcomes could vary significantly.
Hi Team, I’d like to add your calculation into the article. It’s incredible that this has been overlooked and is nowhere in the share price. Although the timing isn’t certain the logic, the simple fact that the US Gov’t would want to offload this liability from the government’s balance sheet makes its IPO seem to be a no brainer to me. OB
Sure. In the last week there have been several headlines discussing the government offloading its stake. They have already invited 6 major banks to discuss it as seen here, although if they only sell $30bn worth, it might be an initial stage to test the market and sell in tranches as the UK government did with NatWest:
https://uk.investing.com/news/stock-market-news/trump-administration-plans-30-billion-stock-sale-of-fannie-mae-freddie-mac--wsj-4211406