Fannie Mae and Freddie Mac Shares Surge Over 30% Federal National Mortgage AssociationOTC_DLY:FNMAKalaGhaziFannie Mae and Freddie Mac Shares Surge Over 30% Following Bill Ackman’s Bullish Endorsement Shares of government-sponsored mortgage giants Fannie Mae and Freddie Mac experienced dramatic gains on Monday, each soaring more than 30% after billionaire investor Bill Ackman publicly described both stocks as “stupidly cheap.” The sharp rally marked the latest development in Ackman’s long-standing campaign to return the two U.S.-controlled entities to major public exchanges, a move that has gained renewed attention as the Trump administration explores potential plans for their release from federal oversight. Trading on the over-the-counter (OTC) markets, shares of Fannie Mae jumped 37%, while Freddie Mac surged 33%, recording their largest intraday percentage increases since May 2025. The surge underscores growing investor enthusiasm around the possibility of the companies exiting the conservatorship that has governed them for more than a decade. Ackman’s Advocacy and Pershing Square’s Stake Over the past year, Ackman and his hedge fund, Pershing Square Capital Management, have been vocal proponents of an “immediate” relisting of Fannie Mae and Freddie Mac on the New York Stock Exchange (NYSE). In November, Ackman publicly petitioned the Trump administration to take action, framing the move as a long-overdue step to restore the companies to private ownership. In January, Pershing Square elaborated on its position, urging the U.S. government to exit its conservatorship of the two mortgage giants within the next two years. The hedge fund argued that such a transition could generate up to $300 billion for American taxpayers, unlocking substantial value that has remained tied up in the government’s control since the 2008 financial crisis. According to the hedge fund, Fannie Mae and Freddie Mac contributed approximately 10.8% of Pershing Square’s overall portfolio performance in 2025, highlighting the significance of the position to the firm’s returns. Ackman amplified his bullish sentiment late Sunday on the social media platform X, referring to the stocks as “stupidly cheap” and expressing confidence that they could deliver a tenfold return on investment over time. Historical Context: From Conservatorship to OTC Trading The Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) were placed under federal conservatorship in 2008 amid the collapse of the U.S. housing market and the broader global financial crisis. By 2010, after their common shares fell below $1, the U.S. government directed both companies to delist from the New York Stock Exchange, relegating them to over-the-counter trading. For years, both stocks traded below the $1 threshold, though they reached a five-year high in September 2025. That earlier rally was fueled by growing optimism that the Trump administration would move to end the longstanding conservatorship. However, in more recent months, shares had trended downward as the housing market cooled under the pressure of elevated mortgage rates and persistently high home prices. What to Watch: Potential IPO Announcements Investor focus is now centered on whether former President Trump will formally announce initial public offering (IPO) plans for Fannie Mae and Freddie Mac. In a Truth Social post from May 2025, Trump stated he was “working on” taking the two companies public, though he has yet to release specific details regarding timing or structure. Adding to the speculation, Federal Housing Finance Agency (FHFA) Director Bill Pulte told CNBC in January that an IPO announcement could come as early as March, further stoking expectations among investors. A Contrarian View from Michael Burry Despite the surge in optimism, not all prominent investors share Ackman’s enthusiasm. Michael Burry, the investor famed for his “Big Short” bet against the U.S. housing market before the 2008 crisis, offered a more cautious outlook last week. Burry characterized any potential IPO for Fannie Mae and Freddie Mac as a “2027 proposition at best,” suggesting that near-term plans are unrealistic. He cited broader economic uncertainty, particularly geopolitical tensions related to the Iran conflict, as a factor likely to make investors hesitant. Burry also painted a grim picture of the U.S. housing market, warning that the combination of high prices and elevated mortgage rates means the sector is “in for a long winter.” Ackman’s Net Worth and Pershing Square’s Broader Moves Bill Ackman, who founded Pershing Square Capital Management in 2004, boasts an estimated net worth of $8.8 billion as of Monday, ranking him the 374th wealthiest individual globally. Pershing Square currently manages approximately $30 billion in assets, with a concentrated stock portfolio that includes 13 firms such as Alphabet, Amazon, Brookfield Corporation, and Uber. In a related development, Pershing Square filed earlier this month for an IPO of a new fund, Pershing Square USA, on the New York Stock Exchange. The fund aims to raise up to $10 billion by offering shares at $50 each. As part of the offering structure, Pershing Square has stated that for every 100 shares purchased in the IPO, investors will receive 20 shares of Pershing Square Capital Management’s common stock—a move designed to align incentives and reward early participants.