Bill Ackman lit the fire and Bill Pulte supercharged it.
Ackman’s theory for the pullback — that leveraged cryptocurrency investors facing margin calls had to sell other assets to raise cash — was echoed by some on Wall Street who saw the stocks drop by more than 10% on Thursday. It happened as Bitcoin was on track for its worst monthly performance since a string of corporate collapses rocked the sector in 2022.
“There was clearly a lot more leverage to take out in crypto and the recent high-flyer equities themes,” Charlie McElligott, a cross-asset strategist at Nomura, wrote in a note to clients Friday.
Shares of the pair are up six-fold since just before Trump’s election on bets Pulte will help oversee a process to privatize Fannie Mae and Freddie Mac after almost two decades of government control. The Trump administration has said it’s a priority, though has been mum on specifics and timing.
Pulte has frequently promoted the idea, with stock traders studying his social media posts for clues about what’s likely coming next.
Fannie and Freddie have been on a similarly tumultuous ride over the past year, including a drop of almost 40% since a Sept. 11 peak when Commerce Secretary Howard Lutnick talked up the prospect of taking them public. The volatility is also driven in part by the fact that the stocks have traded over the counter since they were delisted from the New York Stock Exchange in 2010, limiting the potential investor pool and stock liquidity.
