The resignation of Freddie Mac (OTCQB:FMCC -1.1%) CEO David Brickman constitutes a "negative event," supporting the view that the chances of FMCC's release from government conservatorship have fallen, writes Height Capital analyst Edwin Groshans.
"We would not expect a CEO to resign from an organization that is expected to exit conservatorship and become a publicly traded shareholder-owned company," Groshans writes.
The development bolsters his Sell rating on FMCC common stock and all series of junior preferred shares and on sister GSE Fannie Mae (OTCQB:FNMA -2.1%).
The CEO resignation hadn't been factored into Heights' previous assessment of the stock.
Groshans's Sell rating is more pessimistic than the Neutral Quant rating: 
Brickman's resignation becomes effective on Jan. 8, 2021; Michael T. Hutchins was named interim president as of Nov. 16; he'll continue to lead FMCC's Investments and Capital Markets business.
