Bill Ackman Says Freeing Fannie Mae and Freddie Mac From Government Control Could Unlock $500 Billion in Value, Just as Both Stocks Have Jumped Over 23% in the Past Month. Is Now the Time to Bet on That Payoff?

Billionaire investor Bill Ackman and his managed funds have maintained a commitment to Fannie Mae and Freddie Mac for over a decade. These companies play a significant role in the mortgage market by purchasing mortgages from lenders, packaging them into mortgage-backed securities, and selling them to investors to help banks meet demand. Both entities were placed in conservatorship by the U.S. Treasury Department following the Great Recession due to excessive exposure to subprime mortgages.

Ackman recently stated that releasing the two companies from government control could unlock $500 billion in value. According to Nasdaq Markets, Ackman believes President Donald Trump can issue executive orders to relist the companies and release them from conservatorship.

The companies were scheduled to exit conservatorship sooner, but the process has been complicated. Following their entry into conservatorship, the Treasury Department received a total injection worth over $191 billion in exchange for senior preferred stock and warrants representing nearly 80% of the common stock. Both stocks have jumped at least 23% over the past month.

Brief written by urgent.news from Nasdaq Markets, Motley Fool — 2 reports on this story. Machine-written — may contain errors; check the original before relying on it.