You’ve seen the headlines. For over a decade, Bill Ackman has been the face of a trade that looks like a losing battle to most, but a "lottery ticket" to him. We are talking about Fannie Mae and Freddie Mac. Most people hear those names and think of the 2008 financial crisis, a mess of subprime mortgages, and a government takeover that never seemed to end. But Bill Ackman isn’t most people.
He basically thinks the market is missing a $300 billion opportunity.
It’s easy to call him crazy. Since 2013, his firm, Pershing Square, has held a massive stake in FNMA (Fannie Mae) and FMCC (Freddie Mac) common shares. For years, those shares sat in the "Pink Sheets," trading for pennies while the government swept every cent of profit into the U.S. Treasury. This was the infamous "Net Worth Sweep." It was a legal chokehold that kept private shareholders from seeing a dime. But the tide is turning in 2026.
The $10 Billion Thesis Explained
Ackman isn't just looking for a small win. He has recently labeled Fannie and Freddie his "Best Idea for 2026." Honestly, the math he uses is pretty wild when you first look at it. He believes his stake could eventually be worth $10 billion.
How? By moving the giants out of their "zombie" state.
Right now, Fannie Mae and Freddie Mac back roughly 70% of the U.S. mortgage market. They are essential. They don't actually lend you the money for your house; they buy the loans from banks, package them, and keep the whole system liquid. Without them, the 30-year fixed-rate mortgage basically disappears. Ackman argues that because they are so vital, they shouldn't be treated like government wards forever.
The core of the Bill Ackman on FNMA strategy involves a three-step "walk before you run" approach.
- Acknowledge the Debt is Paid: Ackman points out that the GSEs (Government-Sponsored Enterprises) have already paid back their 2008 bailout funds with interest.
- Exercise the Warrants: The Treasury holds warrants for 79.9% of the companies. Ackman wants the government to just take that ownership officially.
- Relist on the NYSE: This is the big one. If the stocks move from the OTC markets back to the New York Stock Exchange, institutional money—the big pension funds and mutual funds—can finally buy in.
Why 2026 is the Turning Point
Wait, why now? People have been waiting for "the release" for fifteen years.
The political climate has shifted. With a new focus on housing affordability and "big deals," the idea of a massive $300 billion windfall for the taxpayer is becoming hard for Washington to ignore. Ackman has been very vocal on X (formerly Twitter) about why a rushed IPO is a bad idea. He thinks if the government tries to sell everything at once, it’ll flop.
Instead, he’s pushing for a relisting first. Establish a price. Let the market breathe.
In late 2025 and heading into 2026, Ackman's proposal gained serious steam. He suggests that if the companies are relisted, they would trade at 2.5 to 3.5 times their earnings. That sounds low, right? But for companies this size, that’s a massive valuation. He’s projecting a potential share price of $34 by the end of 2026, compared to the roughly $10 range we’ve seen recently.
It’s a "soft landing" approach. No one wants to break the housing market. If you privatize too fast and too aggressively, mortgage rates could spike. Ackman is betting that the government prefers a slow, lucrative exit over a messy, politically radioactive one.
The Legal Battles You Might Have Missed
You can't talk about Bill Ackman on FNMA without mentioning the courtrooms. It’s been a slog.
For years, shareholders sued the government, claiming the Net Worth Sweep was illegal. They lost. Then they won a little. Then they lost again. However, in 2024 and 2025, several rulings started to favor the "implied covenant of good faith." Basically, a jury in D.C. decided that the government didn't treat shareholders fairly.
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Judge Royce Lamberth recently upheld a verdict awarding hundreds of millions to certain classes of shareholders. While it’s not the multi-billion dollar "taking" claim many hoped for, it proves one thing: the government’s total control isn't bulletproof. It adds pressure. It makes the "status quo" of conservatorship look increasingly unsustainable.
What Most Investors Get Wrong
The biggest misconception is that Fannie Mae is still "broke."
It isn't. Not even close.
Under the leadership of the FHFA, the GSEs have been building capital like crazy. They are sitting on billions. The problem is "the capital requirement." The government set a bar so high that it’s almost impossible to reach without some form of restructuring. Ackman’s plan involves lowering these capital requirements to a more reasonable level, similar to what a large bank might hold.
If that happens, they are suddenly "well-capitalized." And once they are well-capitalized, the law says they should be released.
The Risks: It’s Still a Gamble
Don't let the "Best Idea" talk fool you into thinking this is a sure thing. It's still incredibly risky.
- Political Will: If the Treasury decides they like the steady stream of profits too much, they might just stay in conservatorship indefinitely.
- The "Warrant Overhang": If the government exercises its 79.9% stake, current shareholders get diluted. Ackman knows this, which is why he owns such a massive amount of common shares—he needs the sheer volume to make the math work post-dilution.
- Market Shock: If the transition to private hands isn't handled perfectly, investors might flee, thinking the "government guarantee" is gone.
Actionable Insights for Following the Trade
If you're watching the Bill Ackman on FNMA saga, you need to look past the daily price swings. The "Pink Sheets" are volatile. They move on rumors and tweets.
Keep an eye on the FHFA's quarterly capital reports. That is the real scoreboard. If the "gap" between their current capital and the required capital starts to close—or if the requirements are officially lowered—that is your green light.
Also, watch for any movement regarding a NYSE relisting application. That is the catalyst Ackman is banking on. Once it hits the Big Board, the "zombie" era is effectively over.
The goal here isn't to trade the noise. It’s to understand if the structural wall between these companies and the public markets is finally crumbling. Ackman has been right about the long-term profitability of these entities for years; he’s just been waiting for the politics to catch up to the economics. In 2026, it looks like they might finally be in the same room.
Your next move should be to track the Treasury's official stance on exercising warrants. If the government makes a move to formalize their 79.9% ownership, it’s a signal that the "Ackman Plan" is the blueprint they are following.