- Art Cashin: Caution 'Growing' in Financials, Dividend Moves
- 3 Software Stock Picks from Lazard's Senior Analyst
- Investors Bet on a New Year's Rally For eBay
- Why You Should Play the Reflation Trade: Stock Picker
- S&P to Hit 1,200 by Year-End: Chief Investor
- 5 Big Bank Stocks Investors Should Consider: Strategists
- My 2010 Home Price Outlook: UBS Analyst
- Why Are Options Piling into Dollar Tree?
- Markets Can Rise 5-10% in the Near-Term: Strategist
- Buy These 'Competitively Positioned' Stocks: Portfolio Manager
MOST SHARED
- The 'Real' Jobless Rate: 17.5% Of Workers Are Unemployed
- Ritz-Carlton ?Struggling? in the US: President
- Garlic Price Rises Surpass Gold, Stocks in China
- Obama Reiterates Commitment to Boost US-India Ties
- Oil Price to Average $75.40 in 2010: Poll
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Americans Ditch Planes for Trains this Thanksgiving
- New-Home Sales Jump 6.2% To Highest Level in Over Year
- Jobless Claims Below 500,000, Durable Orders Slip
- Topless Business Is Taking Off
- 3 Software Stock Picks from Lazard's Senior Analyst
- Schork Oil Outlook: Gas Bulls Pinning Hopes on Mother Nature
- Toyota Makes Recall Fix And So Long Saab
- Investors Bet on a New Year's Rally For eBay
- Why You Should Play the Reflation Trade: Stock Picker
- Citi Mortgage Reveals What Treasury Won't
- S&P to Hit 1,200 by Year-End: Chief Investor
- Amended Berkshire Hathaway Filing Indicates No Secret Stock Stakes at End of Q3
- Consumer Mood Improves, But Anxiety Over Finances
- Jobless Claims Below 500,000, Durable Orders Slip
- Garlic Price Rises Surpass Gold, Stocks in China
- Judge Erases Couple's $525,000 Mortgage Payment
- Obama Going to Copenhagen Climate Summit
- Half of Banks' Losses May Still Be Hidden: IMF Head
- Seeking Deals, Holiday Fliers Get Early Start
- Americans Ditch Planes for Trains this Thanksgiving
- FDIC's Bair Cautions on Risks in Bank Break-Up Plan
RSS FEED
CNBC Stock Blog
Text Size 
Wachovia shares are down Monday on "crisis psychology" -- but hedge fund master Bill Ackman is optimistic.
Ackman, managing principal of Pershing Square, scooped up a 7 percent stake in Wachovia [WB
Loading...
()
], or "about 170 million shares," amid the news that Citigroup [C
Loading...
()
] would buy the troubled financial's banking business.
"We started buying aggressively after the Citi deal was announced," Ackman told CNBC. "What was interesting was citi was buying a subsidiary, but assuming holding company liabilities -- an unusual transaction.
With rules now in effect that boost acquirors' ability to offset losses from bad debts held by other banks, and as a result of the "unusual" structure of the deal, some "very interesting tax attributes" were created -- namely, tax losses that can be carried back or forward.
"We had to sleuth around to figure out what's going on," he said.
And here's what's going on: "Our estimate of [Wachovia] value, on the low side, is $8 per share. Depending on how much cash is in the holding company, that could be a much higher number."
Ackman addressed the intrusion of Wells Fargo [WFC
Loading...
()
], which made its own higher offer for Wachovia -- an offer that was accepted. The counteroffer was a positive development, says Ackman: "It gave us some certainty" on valuation.
__________________________
CNBC Intelligence:
__________________________
A bidding war would be "positive for the market," engendering "hope for banking in America."
And if Wells wins, "We could wind up as shareholders of...a very well-run franchise," said Ackman.
More optimism for financial stocks: Ackman notes that Pershing Square has also invested in AIG [AIG
Loading...
()
] over the last two weeks.
Disclosures:
Disclosure information was not available for Ackman or his fund.
Data is a real-time snapshot *Data is delayed at least 15 minutes