Hedge fund tycoons shout "10x opportunity," Fannie Mae and Freddie Mac surge 41% and 34% intraday

Driven by billionaire hedge fund manager Bill Ackman’s public call for a bullish turnaround, mortgage finance giants Fannie Mae and Freddie Mac both hit their biggest single-day gains since May 2025 during intraday trading on Monday, with Fannie Mae rising as much as 41% and Freddie Mac climbing as much as 34%.

The immediate trigger for this rebound was Ackman’s high-profile statement on social media that the two institutions’ stock prices are “absurdly cheap.” However, the gains on the day only partially offset the prior deep selloff that had lasted for months; as of the time of this writing, both stocks are still down about 60% from their mid-September 2024 highs.

Market concerns are continuing to intensify over the prospects of the Trump administration’s plan to take the two GSEs out of federal conservatorship, and this key factor weighing on prices has not undergone any substantive change.

Ackman’s remarks: maybe a “10-bagger opportunity”

On the X platform, Ackman said Fannie Mae and Freddie Mac offer the “best asymmetric investment opportunities,” and predicted “potentially achieving 10x returns, with a chance to realize them in the short term.”

The founder of Pershing Square Capital Management framed the current opportunity within a broader macro investment context, saying that “a global group of the highest-quality companies are trading at extremely low prices,” and that the present is “one of the best times in recent years to buy quality assets.”

Ackman had previously lobbied the White House actively for the private-sector takeover and restructuring proposal for the two GSEs, so his public comments have drawn significant attention from the market and are seen as an important signal for interpreting progress on related policy.

Stock prices still mired in a slump; valuation dominated by policy uncertainty

Even though the day’s rally was strong, after Monday’s surge the two stocks still gave back about 60% from their interim highs from mid-September last year.

The prior deep selloff was mainly driven by the market’s waning confidence in the Trump administration’s reform roadmap for the two GSEs. Since the financial crisis in 2008, the two GSEs have remained under federal conservatorship, and outside expectations had been that the new administration would accelerate their return to the private market, a narrative that at one point pushed the stocks sharply higher. But as the policy timeline became increasingly unclear, the premium built up earlier was quickly unwound.

For investors, the trajectory of valuation for the two GSEs still largely hinges on the pace and intensity of policy implementation. While Ackman’s public endorsement boosted market sentiment in the short run, whether it can actually reverse policy-level uncertainty remains to be seen.