From one perspective, the hedge fund manager William A. Ackman had a good day on Wednesday. The Federal Trade Commission announced an investigation into Herbalife, a company that he is betting against, sending its shares tumbling.
While that drama was playing out, however, another of Mr. Ackman’s bets was coming under pressure. Shares of Fannie Mae and Freddie Mac, the mortgage giants that were rescued by the government in the financial crisis, were falling after Washington lawmakers proposed winding them down. Mr. Ackman, through his firm, Pershing Square Capital Management, is a major holder of those shares. (Pershing Square, in fact, is the largest shareholder after the United States government.)
The plan to eliminate Fannie and Freddie was announced on Tuesday by the top Democrat and Republican on the Senate Banking Committee. They proposed a housing finance overhaul that would provide an explicit government guarantee for mortgages after private investors take the first losses.
Here is a look at how those investments did this week through Wednesday, with a few more of Mr. Ackman’s holdings thrown in for good measure.
Bearish bet
- Herbalife: down 6.4 percent
Bullish bets
- Fannie Mae: down 33.6 percent
- Freddie Mac: down 34.8 percent
- Air Products & Chemicals: down 1.6 percent
- Procter & Gamble: up 1.1 percent
- General Growth Properties: up 1 percent
- Canadian Pacific Railway: up 0.5 percent
