Federal National Mortgage Association (Fannie Mae) Stock in December 2025: Michael Burry’s Big Bet, Trump’s IPO Plans and What Comes Next

Published December 9, 2025 – For informational purposes only, not investment advice.

Where Fannie Mae’s Stock Stands Now

Federal National Mortgage Association – better known as Fannie Mae and traded over-the-counter as FNMA – has turned from a forgotten bailout relic into one of 2025’s most closely watched speculative trades.

As of the close on December 8, 2025, Fannie Mae’s common stock changed hands at about $11.44 per share, up roughly 8% over the past five trading days and nearly 250% year-to-date, according to MarketScreener’s summary of OTC trading. ^[1] StockInvest, a technical-analysis service, records a similar last close of $11.45, with a 52‑week range from about $2.24 to $15.98, underscoring just how volatile the name has become. ^[2]

Despite trading OTC rather than on a major exchange, Fannie Mae has once again become a focal point for macro investors, housing‑market watchers and political risk‑tolerant traders. That renewed attention is being driven by three big storylines:

1. Michael Burry’s newly revealed “sizable” stake and bullish IPO thesis
2. The Trump administration’s push to take Fannie Mae and its sibling Freddie Mac public again
3. Conflicting forecasts and valuations that span everything from deep value to bubble‑territory warnings

Michael Burry Steps In: “Toxic Twins No More”

The latest jolt of excitement came on December 8, when investor Michael Burry – famous for “The Big Short” – disclosed that he owns “sizable positions” in both Fannie Mae and Freddie Mac. ^[3]

In his Cassandra Unchained Substack newsletter, Burry argued that:

• He expects the government‑backed mortgage giants to be taken public again via IPOs.
• He projects IPO pricing at roughly 1.0–1.25× book value, with the shares potentially trading up to 1.5–2.0× book value within one to two years of listing. ^[4]
• Once freed from strict capital constraints, he believes growth will “naturally” accelerate as the companies operate with more flexibility. ^[5]
• He would “not be surprised” if Berkshire Hathaway took a substantial position in any IPOs, citing Warren Buffett’s history of investing in mortgage‑related financials. ^[6]

Burry also emphasized how central Fannie and Freddie remain to the U.S. housing system, noting that the government‑sponsored enterprises (GSEs) own or guarantee roughly 62% of outstanding U.S. mortgages and support about 70% of conforming bank loans. ^[7]

The market reaction was immediate: Reuters reported Fannie Mae’s stock gaining nearly 2% on the day of Burry’s disclosure, with Freddie Mac also up more than 2%. ^[8] Seeking Alpha separately flagged that both GSEs climbed after investors digested Burry’s Substack analysis. ^[9]

Burry has framed the stocks as “Toxic Twins No More”, a pointed reference to their near‑collapse in 2008 and the years of litigation and political battles that followed. ^[10] For bulls, the endorsement of a high‑profile skeptic of financial excess is a powerful narrative tailwind.

Trump’s IPO Push: From Conservatorship to “Recap and Release”?

While Burry’s stake is new information, the broader IPO story has been building all year.

In late May, Reuters reported that President Donald Trump said on social media that his administration was working on taking Fannie Mae and Freddie Mac public again, potentially returning them to the New York Stock Exchange or Nasdaq. ^[11] Those posts sparked another leg higher in the OTC‑traded common shares, which have already multiplied several times since Trump’s election.

Key elements of the emerging policy picture:

• The administration has floated the idea of re‑listing the GSEs while preserving an implicit government backstop of their obligations – effectively a “public‑private hybrid” structure. ^[12]
• The U.S. Treasury still holds warrants representing 79.9% of each company’s common equity, a legacy of the 2008 rescue, making capital structure a central question for any IPO. ^[13]
• FHFA (the Federal Housing Finance Agency) Director Bill Pulte has suggested the GSEs could represent “trillions of dollars of value” for taxpayers if recapitalized and released carefully. ^[14]
• Fannie Mae has also signed a high‑profile deal with Palantir to deploy AI‑driven fraud‑detection tools, and the companies have explored collaborations with Elon Musk’s xAI, underscoring their attempt to present themselves as modern data‑driven financial platforms. ^[15]

The politics and mechanics of “recap and release” remain messy. But the direction of travel under the current administration clearly leans toward some form of public‑market relisting, which is the foundation of both Burry’s thesis and several other bullish analyses published this autumn. ^[16]

Leadership Shake‑Up at Fannie Mae

Against this backdrop, Fannie Mae’s internal leadership has also been reshuffled.

On October 22, 2025, Dow Jones reported that CEO Priscilla Almodovar stepped down as the Trump administration evaluates a potential stock sale. ^[17]

• Peter Akwaboah, previously chief operating officer and a former senior executive at Morgan Stanley, was named acting CEO.
• John Roscoe and Brandon Hamara were promoted to co‑presidents, creating a three‑person leadership bench. ^[18]
• FHFA had earlier removed eight board members and installed new directors, including Bill Pulte as board chair, signaling tighter regulatory and political oversight. ^[19]

Subsequent coverage has also highlighted job cuts – more than 62 positions eliminated across various departments – and controversy over the Trump administration’s removal of some Fannie Mae ethics officials. ^[20]

For investors, the leadership changes and governance interventions reinforce a key reality: FNMA is not a normal bank stock. Its fate is deeply entangled with federal policy and the priorities of the current administration.

Earnings Picture: Still Profitable, But Growth Slowing

Fundamentally, Fannie Mae remains a large, profitable credit utility, even after years in conservatorship.

In its third‑quarter 2025 results, Fannie Mae reported: ^[21]

• Q3 2025 net income: about $3.9 billion, down from $4.0 billion in the same quarter a year earlier.
• Net income for the first nine months of 2025: about $10.8 billion, compared with $12.8 billion in the first nine months of 2024.

The company attributed the year‑on‑year decline to a mix of normalization in credit performance, evolving guarantee‑fee margins and market‑driven swings in the value of its mortgage portfolio. However, the absolute level of earnings remains substantial relative to the current common‑equity valuation.

A recent comparative analysis by Defense World using MarketBeat data showed Fannie Mae generating gross revenue of roughly $152.7 billion and net income around $17.0 billion, with net margins of 7.0%. Return on assets was modest at 0.34%, while reported return on equity was deeply negative (-37.5%), reflecting the unusual capital structure and government‑related claims on profits. ^[22]

The takeaway: Fannie Mae’s underlying operating engine is large and profitable, but the economics that actually accrue to common shareholders remain heavily dependent on how the government restructures capital and future dividend obligations.

Macro and Housing Forecasts: Fannie’s Own ESR Outlook

Fannie Mae’s Economic and Strategic Research (ESR) Group publishes one of the more widely followed housing and macro outlooks on the Street. While the ESR forecasts are not explicit guidance for Fannie’s stock, they frame the environment in which the company operates.

In its October 2025 Economic and Housing Outlook, ESR highlighted: ^[23]

• U.S. real GDP growth (Q4/Q4) now expected at 1.9% in 2025 and 2.3% in 2026, modestly higher than previous forecasts.
• Headline CPI inflation projected at 2.9% for 2025 and 2.7% for 2026, with core inflation easing but still above the Fed’s 2% target.
• 30‑year mortgage rates seen ending 2025 around 6.3% and 2026 near 5.9%, only a gradual decline from today’s elevated levels.
• Total home sales forecast at 4.74 million in 2025 and 5.16 million in 2026, implying a slow recovery from today’s depressed turnover.
• Home price growth expected to moderate to 2.5% (2025) and 1.3% (2026) on a Q4/Q4 basis.
• Single‑family mortgage originations projected at $1.88 trillion for 2025 and $2.35 trillion for 2026, slightly higher than prior estimates.

For Fannie Mae, this scenario implies:

• Volumes: A gradual rebound in originations rather than a boom
• Credit quality: Stable to slightly improving, as price growth slows but does not reverse sharply
• Margins: Still‑elevated mortgage rates could support guarantee‑fee income, but competition and policy may limit pricing power

In other words, ESR is sketching a “slow-normalization” housing cycle, not a run‑away bubble or a deep crash. That backdrop is supportive – but not explosive – for the GSE’s core earnings power.

Wall Street Is Split: From Deep Value to Overvaluation

Analyst Ratings and Targets

On the sell‑side, opinions on Fannie Mae stock are sharply divided.

A MarketBeat/Defense World summary of analyst recommendations shows: ^[24]

• 2 Sell ratings
• 1 Hold rating
• 2 Buy ratings

That yields a “Hold”‑type consensus score of 2.0, versus 2.5 for mortgage originator PennyMac Financial Services (PFSI), which analysts view more favorably on average. ^[25]

Even so, the consensus 12‑month price target for Fannie Mae is about $12.88, implying roughly 12–22% upside from recent trading levels, depending on the exact reference price used. ^[26]

Recent rating moves underscore the uncertainty:

• Wedbush shifted dramatically on November 25, assuming coverage at Outperform with an $11.50 price target, up from prior Underperform with a $1 target – a wholesale re‑rating of Fannie’s post‑election prospects. ^[27]
• Deutsche Bank initiated coverage in September with a Buy rating and a $20 price target, implying significant upside if an IPO and recapitalization proceed smoothly. ^[28]
• B. Riley took a more cautious stance on September 5, starting at Neutral with a $10 target, slightly below current levels. ^[29]

These widely dispersed targets – $10, $11.50, and $20 – reflect differing assumptions about IPO timing, capital structure, and how much value leaks to the government and preferred shareholders.

Quant and Technical Views

Data‑driven services have also weighed in, often with conflicting messages:

• StockInvest.us recently upgraded FNMA from Hold to a “Buy candidate” after a strong early‑December run, noting “several short‑term signals are positive” despite the stock being in a broader falling trend from its 52‑week high. ^[30]
  • The service expects trading on December 9 to open around $11.32 and potentially oscillate between $11.01 and $11.89, an intraday swing of about ±8% based on recent volatility. ^[31]
  • It also flags nearby resistance around $12.55 and support near $10.33, suggesting the immediate risk/reward inside this band is not especially attractive. ^[32]
• A valuation analysis hosted on Webull (drawing on Simply Wall St models) points out that Fannie Mae trades at about 2.3× price‑to‑sales, versus roughly 4× for direct peers and 2.5× for the broader U.S. diversified financial industry. That ratio looks inexpensive on a relative basis. ^[33]
  • However, the same article notes that a discounted cash flow (DCF) model pegs fair value closer to $2 per share, implying the stock is materially overvalued if future cash flows do not expand dramatically. ^[34]
• A Defense World / MarketBeat comparison shows Fannie Mae’s beta at 2.01, roughly twice as volatile as the S&P 500, and highlights that 0.0% of FNMA shares are held by institutional investors (at least as captured by their database), versus nearly 58% institutional ownership for PennyMac. ^[35]

Put together, the models confirm what the price history already screams: FNMA is highly volatile, lightly owned by institutions, and extremely sensitive to assumptions about future policy.

The Giant Valuation Question: How Big Could Post‑IPO Fannie Mae Be?

If there is one thing analysts agree on, it is that valuation depends almost entirely on the eventual capital structure.

A widely discussed Seeking Alpha analysis, summarized on StockAnalysis.com, argues that Fannie Mae is positioned for a “historic IPO” with potential equity valuations between roughly $210 billion and $420 billion, depending on how much capital it must raise, how Treasury’s warrants are handled and how generously markets value its “scarce” near‑monopoly status in conforming mortgage securitization. ^[36]

Michael Burry’s framework is different but rhymes:

• By anchoring his expectations at 1–1.25× book value at IPO and 1.5–2× book value within one to two years, he is effectively asserting that the market will be willing to treat Fannie Mae like a profitable, system‑critical financial utility, not a permanently impaired bailout ward. ^[37]

On the other side of the debate, Pershing Square’s Bill Ackman, one of the most prominent legacy investors in the GSEs, has publicly pumped the brakes.

In a November 18 Reuters interview, Ackman argued that a near‑term IPO of Fannie and Freddie is “not feasible or desirable” given the complexity of merging or restructuring the entities and the legal hurdles around government‑created holding companies. ^[38]

Instead, he proposed:

• Maintaining the companies as separate entities
• Moving their OTC listings to the New York Stock Exchange, which he believes could still drive a combined equity valuation on the order of $400 billion without the complications of a traditional IPO. ^[39]
• Recognizing past government dividend payments to reduce preferred stock obligations and easing some capital requirements to make the system more workable for private investors. ^[40]

Ackman’s stance is striking: he broadly agrees that the GSE franchises are worth hundreds of billions, yet disagrees with the administration’s preferred IPO‑first playbook and warns that some current proposals could be structurally unworkable.

Common vs Preferred: Scenario Analyses and Capital Structure Risk

The uncertainty is not just about how much Fannie Mae could be worth, but also who actually gets what.

A September article on Seeking Alpha, “Four Scenarios for Fannie Mae and Its Preferreds,” frames 2025–2026 as a pivotal period with multiple possible paths for both common and junior preferred shareholders. ^[41] While the full analysis is behind a paywall, the four broad themes typically discussed in such scenario work include:

1. Clean recapitalization and IPO – new equity issued, government stakes restructured, preferred shares converted into common or redeemed at some negotiated value.
2. Exchange‑heavy solution – significant conversion of preferreds into common shares, diluting existing common but reducing future overhang.
3. Status‑quo‑plus – continued conservatorship with OTC trading, modest capital release and no full IPO, effectively extending today’s limbo with better transparency.
4. Adverse legal or political outcome – legislative roadblocks, lawsuits or changes in administration priorities that delay or radically alter any privatization.

For common shareholders, the range of outcomes runs from multibagger to wipe‑out, depending on how much dilution accompanies recapitalization and how aggressively the government chooses to monetize its position.

How Current News and Forecasts Fit Together

Putting the latest news flow in context:

• Burry’s “sizable” stake and bullish book‑value multiples reinforce the upside case that a fully recapitalized, exchange‑listed Fannie Mae could justify a valuation many times today’s OTC market price, especially if investors pay up for its dominant share of conforming mortgage finance. ^[42]
• Trump administration policy and FHFA’s actions strongly suggest some form of recapitalization and public‑market relisting remains a real priority, with Palantir/xAI partnerships and leadership changes all serving to make the company look more like a modern, investor‑friendly platform. ^[43]
• Ackman’s skepticism on a near‑term IPO shows that even long‑term bulls are divided on how to get from here to there. His suggestion of an NYSE relisting without a massive new‑money IPO underlines the possibility that the administration’s preferred structure could evolve materially. ^[44]
• Fundamental data – steady multi‑billion‑dollar quarterly profits and ESR’s forecast of modest, ongoing housing growth – supports the idea that the core franchise is sound, even if growth is not spectacular. ^[45]
• Valuation models and analyst targets paint a wildly inconsistent picture, from a DCF‑derived fair value near $2 per share to bullish scenarios implying triple‑digit billions of equity value. ^[46]
• Technical and ownership data (high beta, minimal institutional ownership, a 52‑week range from $2 to nearly $16) confirm that FNMA behaves more like a policy‑option with equity characteristics than a conventional blue‑chip. ^[47]

Key Risks Investors Are Watching

Anyone following Fannie Mae stock into 2026 is effectively wagering on policy, timing and structure, as much as on credit fundamentals. Commonly cited risks in recent research include:

• Political risk: A change in administration or congressional priorities could derail or reshape the IPO/recap plan.
• Legal risk: Ongoing and potential lawsuits by shareholders over past profit sweeps and future capital decisions could slow or complicate any restructuring.
• Dilution risk: Depending on how Treasury’s warrants, legacy preferreds and new capital requirements are handled, existing common shareholders could be heavily diluted. ^[48]
• Macro risk: If ESR’s relatively benign outlook proves wrong – for example, if mortgage rates stay higher for longer and home prices fall instead of merely slowing – Fannie’s credit costs and earnings could deteriorate. ^[49]
• Execution risk: Leadership turnover, staff cuts and governance reshuffles create the possibility of mis‑steps just as the company navigates its most complex transition since the 2008 crisis. ^[50]

Bottom Line: A 2025 Story Stock Anchored in a 2008 Question

As of December 9, 2025, Federal National Mortgage Association stock sits at the crossroads of politics, housing economics and deep‑value speculation.

• The bull narrative is louder than it has been in years, energized by Michael Burry’s endorsement, the Trump administration’s explicit IPO talk and bullish sell‑side targets as high as $20 per share. ^[51]
• The bear and skeptic side points to a DCF‑based fair value closer to $2, negative reported return on equity, outsized volatility and unresolved questions about who will ultimately own how much of the recapitalized franchise. ^[52]

What is clear is that FNMA is no longer just a forgotten conservatorship stub. It has become, once again, a live policy trade on the future shape of the U.S. mortgage market.

For readers and investors tracking the story into 2026, the crucial questions are less about whether Fannie Mae can earn billions – it already does – and more about whether, when and on what terms those billions will ever fully belong to public shareholders again.

References

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