Shares in Fannie Mae and Freddie Mac surged on Monday after billionaire hedge fund manager Bill Ackman took to social media late Sunday night to urge investors to stop fixating on the conflict in Iran and start buying the two government-backed mortgage giants.
Fannie climbed as much as 41% during the session, while Freddie added up to 34% — the largest single-day moves for either stock since last May, when the idea of privatising the two entities first gained serious traction. Ackman’s post on X appeared to be the only clear trigger for the move.
In the post, Ackman argued that markets were overreacting to geopolitical fears and that some of the best businesses in the world were trading at irrationally low prices. He called Fannie and Freddie “stupidly cheap” and floated the prospect of a tenfold return in the not-too-distant future.
What he didn’t lead with: his firm, Pershing Square Capital Management, holds more than 210 million combined shares in the two companies, making it the single largest common shareholder in both. He has been building and advocating for these positions for over a decade, and has been one of the loudest voices pushing for privatisation of the two entities. The glowing stock tip and his enormous financial stake in the outcome are impossible to separate.
The timing raised additional eyebrows. Monday was the final trading day of the first quarter, and the closing price on the last day of the quarter is what gets reported to investors in performance statements. A 40% rally in your biggest holding on that exact day is, at the very least, a fortunate coincidence. Ackman pulled a similar move on December 30, 2024 — the second-to-last trading day of Q4 — when he published a detailed bullish thesis on the GSE trade that racked up nearly five million views and sent both stocks sharply higher.
To be fair, the underlying valuation argument isn’t without merit. Fannie reported $14.4 billion in net income last year; Freddie posted $10.7 billion. Their combined market cap before Monday’s rally was sitting around $10 billion — meaning both companies collectively earn more than twice their entire market value every year. Michael Burry, known for predicting the 2008 housing crisis, backed Ackman’s read on the valuation, calling such an opportunity exceptionally rare in the current market.
Burry also took the moment to weigh in on the broader housing picture, arguing that keeping the GSEs in conservatorship has been a key factor holding back housing supply — compounding the damage done by years of low interest rates and trillions in pandemic-era stimulus spending.
The core bullish thesis — that the Trump administration will eventually take Fannie and Freddie public via an IPO — has been the prevailing narrative since both companies entered government conservatorship during the 2008 financial crisis. It has yet to materialise. Fannie peaked around $15.30 per share in September 2025 on peak privatisation optimism; even after Monday’s gains, both stocks remain roughly 60% below that high. White House housing director Bill Pulte signalled late last year that an IPO decision was imminent, but no announcement has followed.
Not everyone is convinced a fast-tracked privatisation would be good policy. Some economists warn that handing for-profit entities access to government-backed borrowing — without sufficient safeguards — risks recreating the same dynamic that contributed to the housing market’s collapse in 2008.
Ackman’s December post included a disclaimer urging investors to limit exposure to what they could afford to lose. Sunday’s post carried no such caveat. He closed with two words: “Ignore the bears.”