Billionaire Bill Ackman said now isn’t the right time for the Treasury to sell its shares of the government-sponsored mortgage giants known as Fannie Mae and Freddie Mac.
The Pershing Square Capital Management founder held a presentation on X Tuesday that said it “will take significant time” for the government to “deliberately execute” an initial public offering of its shares of Federal National Mortgage Association and Federal Home Loan Mortgage Corp. He also laid out a series of moves — including re-listing on the New York Stock Exchange — that could help Trump take some action sooner.
Ackman said there are a few steps that should be taken before the government sells its shares because it will take some time to get buy-in from market participants, according to Ackman. He has previously said that his firm owns shares of Fannie Mae and Freddie Mac, which soared after Donald Trump’s election.
As part of its 2008 bailout of Fannie and Freddie, the government received preferred shares and warrants giving it the right to buy up to 79.9% of common stock in each company. Ackman proposed that the US exercise those warrants, and thus end up owning those shares.
The billionaire said that the US should re-list the companies on the NYSE, which would be possible if the preferred shares were deemed to be repaid. That’s fair given the Treasury has recouped all the cash it invested in Fannie and Freddie plus about $25 billion more than what it was owed in dividend payments, Ackman said.
Shares of Federal Home Loan Mortgage Corp., known as Freddie Mac, were up about 3.7% at 11:58 a.m. in New York, while the stock of Federal National Mortgage Association, known as Fannie Mae, climbed about 1.1%.
The Trump administration has been weighing a public offering of the mortgage giants, which the Bush administration put in conservatorship in September 2008 to head off their failure during the financial crisis.
While Trump is considering doing the offering as soon as year-end or early 2026, some market participants have said that an IPO that soon is wildly optimistic.
Some critics have argued that releasing Fannie and Freddie without replacing their explicit government guarantee could make investors wary about buying mortgage-backed securities, which in turn would increase funding costs and home financing rates.
In late December, Ackman had laid out a two-year timeline for the government’s exit, predicting that the US government would ultimately make a profit of about $300 billion.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
