FNMA Stock: Bill Ackman Says It Could Return 10x — Michael Burry Agrees. Should You Listen?

Approximately 7,000 people work in a building in Washington, DC, every day to perform the operational tasks necessary to keep the American mortgage market running. These tasks include purchasing bank loans, bundling them into securities, and guaranteeing the payments that keep the system running. Fannie Mae owns the building. The company makes about $29 billion a year. Its goal, as stated by Congress in 1938, is to enable common Americans to become homeowners.

However, since September 2008, it has been a federal government ward, with its common stock trading on over-the-counter (OTC) markets, such as the electronic pink sheets rather than the NYSE or Nasdaq, at prices that fluctuate so much that it appears that buyers and sellers of FNMA shares have quite different ideas about what they are actually purchasing.

To be precise, that volatility is not irrational. In the last 52 weeks, the FNMA has fluctuated between $3.60 and $15.99, a range that makes most speculative stocks appear muted. The stock dropped 4.8% in a single session on April 13, 2026, reaching as low as $7.60 on a volume of about 830,000 shares. This is an 89% decrease from the average session volume, indicating that the selling was disorderly and thin rather than a widespread institutional exit.

Fannie Mae’s Q4 2025 EPS of $0.60 fell short of its $0.68 estimate, but revenue of $7.33 billion was in line with forecasts. Given that Fannie Mae’s accounting is governed by the terms of its conservatorship rather than standard corporate incentives, the company’s return on equity, which stands at a negative 49.21%, would be concerning for most financial institutions.

Understanding FNMA stock requires an understanding of the conservatorship. When it became evident in September 2008, at the height of the financial crisis, that Fannie and its sibling Freddie Mac were exposed to so many subprime mortgages that their failure would have had a domino effect on the entire US housing finance system, the company was placed under federal control. Since then, the government has intervened, given hundreds of billions in support, and has been transferring the companies‘ profits into the US Treasury. This practice has been repeatedly contested in court, resulting in a convoluted legal drama that continues to influence investors’ perceptions of the stock.

For the better part of seventeen years, the common shares—which are devoid of dividends and positioned beneath preferred stock and government obligations in the capital structure—have been a theoretical wager on one particular result: that Fannie and Freddie would eventually be freed from conservatorship and permitted to resume operating as independent businesses under the Trump administration or another administration.

There are currently well-known supporters of that wager. In late March 2026, Bill Ackman, the founder of Pershing Square Capital Management and one of the nation’s most prominent hedge fund investors, wrote on X that Freddie Mac and Fannie Mae were “stupidly cheap” and could provide ten times returns compared to current prices. He framed the decline as an overreaction and the underlying assets as genuinely valuable, describing both stocks as down about 40% year-to-date. In response to Ackman’s post, Michael Burry, the investor whose 2008 short position on mortgage-backed securities was dramatized in The Big Short, offered his own optimistic assessment.

He called the setup “rare” and mentioned that he had acquired a substantial stake in both companies in December 2025, having changed his earlier skepticism in response to the Trump administration’s housing finance agenda. BTIG’s $20 price target, which was started in January 2026 with a “Buy” rating, is in line with an analyst consensus average of $14.30, which suggests a roughly 74% increase from current levels.

The tension in all of this is difficult to ignore. When the headline “Fannie Mae is backing Bitcoin-backed mortgage loans now” appeared in April 2026, it was met with the appropriate caution and sincere interest that the news most likely deserved. The most recent experiment with cryptocurrency collateral in the housing finance system raises unanswered questions about risk management. In the same month, Fannie’s own housing forecast predicted that the thirty-year fixed mortgage rate would drop from 6.0% in early 2026 to 5.7% by the fourth quarter. This significant decrease, if it comes to pass, would improve affordability and possibly spark demand from the millions of prospective buyers who have been holding off while rates remained above six percent.

Thus, the FNMA investment thesis is multilayered. In its most basic form, it is a wager that the conservatorship will end, the company will be recapitalized, and the common shares, which are currently trading significantly below book value on any reasonable estimate, will reflate toward valuations that are closer to those of typical bank stocks. The stock was downgraded to “strong sell” by Zacks Research in February 2026, but B. Riley kept its rating “neutral.” There is no disagreement regarding quarterly earnings between the most optimistic and pessimistic perspectives on this stock. There is a dispute over whether the federal government will take action that it has been putting off for seventeen years. That is a completely different kind of risk.