The U.S. government may soon return Fannie Mae and Freddie Mac to private markets less than two decades after turmoil nearly toppled the mortgage industry.
Fannie Mae and Freddie Mac were bailed out by the government during the housing crisis nearly 17 years ago. The Trump administration is considering letting them go private again.
Bill Ackman's detailed presentation on Fannie Mae and Freddie Mac highlights the steps needed to end conservatorship, including capital requirements and market-based policies. The Trump Trade has significantly boosted FNMA and FMCC stocks, but investors should be cautious of momentum trades due to their volatility and low liquidity. Ackman's valuation estimates for Fannie and Freddie are ambitious, with IPOs expected in 2026 and 2027, but long-term risks and uncertainties remain.
Pershing Square's Bill Ackman has a long-term investment in Fannie Mae and Freddie Mac, betting on their privatization and significant future gains. Fannie and Freddie, government-sponsored entities, play a crucial role in the mortgage market and have shown strong financial performance despite low stock prices. Ackman's investment conviction is high, expecting massive payoffs, driven by upcoming catalysts like his presentation and Trump's inauguration.
Keefe Bruyette thinks Freddie Mac's (FMCC) announcement that Craig Phillips will join the company as executive vice president, corporate strategy and external affairs will be seen as an indication that the company is preparing for an effort by the Trump administration to privatize the government-sponsored enterprises. During Trump's first team, Phillips worked as Counselor to the Treasury Secretary and was leading the GSE privatization effort, the analyst tells investors in a research note. Keefe expects the shares of Freddie Mac and Fannie Mae (FNMA) to respond positively to the news. However, the firm continues to think there could be "meaningful downside" to the common shares if privatization occurs. The government's senior preferred shares are likely to be converted to common shares resulting in meaningful dilution to the common shares, contends Keefe. The firm has a Market Perform rating on both Freddie and Fannie. Freddie Mac + (+0.00%) Fannie Mae + (+0.00%)
Freddie Mac: What Is Bill Ackman's Strategy?
President-elect Donald Trump has made many investors bullish on the market, which has been on an incredible two-year run. Many believe deregulation and corporate tax cuts could create powerful tailwinds, unlocking positive investor sentiment that could propel stocks higher.
Shares of Fannie Mae and Freddie Mac , the mortgage giants under U.S. government control since 2008, surged to multi-year highs on Friday after federal agencies revealed a framework for their "orderly" release from conservatorship.
Bill Ackman anticipates that US President-elect Donald Trump will remove Fannie Mae and Freddie Mac (OTCQB:FMCC) from conservatorship, potentially converting them into private entities. Following Ackman's remarks on social media platform X, Fannie Mae and Freddie Mac stock surged 36% and 34% respectively.
Fannie Mae FNMA and Freddie Mac FMCC shares soared on Monday afternoon after billionaire investor Bill Ackman touted the stocks on social media.
CNBC's Diana Olick joins 'Closing Bell' to discuss tweets from Pershing Square CEO Bill Ackman on Fannie Mae and Freddie Mac.
Bill Ackman expects U.S. President-elect Donald Trump to remove Fannie Mae and Freddie Mac from conservatorship, potentially making them private companies again, the billionaire investor said on Monday.