Hedge fund executive Bill Ackman called on investors to reacquaint themselves with Fannie Mae (OTCQB: FNMA) and Freddie Mac (OTCQB: FMCC), which resulted in a surge of stock activity for the government-sponsored enterprises (GSEs).
In a series of posts on X on Sunday, Ackman declared, “Some of the highest quality businesses in the world are trading at extremely cheap prices. Ignore the MSM. One of the most one-sided wars in history that will end well for the U.S. and the world. And we have the potential for a large peace dividend. One of the best times in a long time to buy quality. Ignore the bears.”
Ackman, who is the founder and CEO of Pershing Square Management and owns an approximately 10% share in the GSEs, added, “And Fannie and Freddie are stupidly cheap. Asymmetry at its best. They could be a 10X and it could happen soon.”
On Monday, investors took Ackman’s advice seriously. According to a Fortune report, Fannie Mae shares soared by as much as 41% in trading while Freddie Mac shares rose by as much as 34%. These were the largest single-day moves for each stock since last May when President Trump first mused about privatizing the two GSEs.
Ackman’s confidence in the GSEs stands in contrast to a more pessimistic view held by another prominent investor. Last week, Michael Burry of “The Big Short” fame used a Substack posting titled “The Toxic Twins Recurrence” to predict the earliest date for a Fannie-Freddie initial public offering would be 2027.
Photo courtesy of the Pershing Square Foundation
When someone says buy, buy, buy, they probably need to unload some stock. LOL
The last time I bought Fannie and Freddie I took a huge loss when the Government took over.
Okay, if these stocks are currently not being publicly traded, which I’m extrapolating because they have not yet had an IPO, how does this Ackman guy own 10% of them? How can the shares go anywhere, either up or down?
Shares are traded on the OTC markets. The IPO would move Fannie and Freddie to the NYSE.