Pershing Square Holdings (PSH) Investor Update summary

Strategic proposal and government engagement

• Advocates for relisting Fannie Mae and Freddie Mac on the NYSE, not an IPO, to unlock value and broaden investor access while maintaining conservatorship.

• Suggests the government acknowledge repayment of senior preferred, exercise warrants, and relist, which could be executed quickly by the President, Treasury Secretary, and FHFA Director without congressional approval.

• Emphasizes that the plan eliminates risk to the mortgage market and aligns with administration objectives, providing a win for both shareholders and the President.

• Publicly shares the proposal to gather stakeholder feedback and increase transparency for the administration.

Valuation, shareholder impact, and market dynamics

• Fannie and Freddie are valued at 13–16x earnings, but some projections show them trading at 3.5x and 2.5x earnings per share, indicating deep undervaluation; relisting is expected to significantly boost share prices.

• By year-end 2025, the implied market capitalization for both companies is estimated at $387 billion, with the Treasury's 79.9% stake valued at $310 billion.

• Relisting would expand the investor base, improve liquidity, and remove overhangs related to preferred conversion fears.

• Government's 79.9% stake could be held long-term, compounding value and providing ongoing dividends, benefiting both public finances and housing initiatives.

• Short selling concerns are downplayed due to regulatory safeguards and the anticipated strength of the relisted entities.

Market performance and investor sentiment

• Fannie Mae and Freddie Mac shares more than doubled in value year-to-date, driven by public statements from President Trump and administration officials about taking the companies public and maintaining government guarantees.

• Institutional and retail investors, including major financial institutions, have increased holdings in anticipation of a public offering, with significant retail enthusiasm on social media platforms.