Bill Ackman's 'Best Idea' For 2026: Freedom For Fannie and Freddie

Core Viewpoint - Billionaire investor Bill Ackman has reaffirmed his investment in Fannie Mae and Freddie Mac, calling their release from federal conservatorship his "Best Idea for 2026" [1] Group 1: Ackman's Proposal - Ackman's strategy involves a three-step "walk before you run" approach aimed at stabilizing the housing market while benefiting the U.S. Treasury [2] - The plan includes a repayment acknowledgment, where the U.S. Treasury and FHFA should recognize that the GSEs have repaid their initial $190 billion bailout, returning over $300 billion in profits to the government [8] - The proposal also suggests that the government should exercise its warrants for a 79.9% stake in both companies, creating a mark-to-market windfall estimated at over $300 billion [8] Group 2: 2026 Catalyst - Ackman identifies 2026 as a crucial year for this investment, projecting that if Fannie and Freddie trade at 16x and 13x their estimated 2026 earnings, their shares could see an upside of 300% to 400% [4] - The relisting of Fannie and Freddie would provide a three-year period for the Trump administration to finalize capital requirements and management structures [4] - Michael Burry has echoed a similar sentiment, suggesting that the government is preparing to re-privatize the GSEs through a massive IPO, potentially valuing them at $500 billion by 2026 [5] Group 3: Financial Implications - Ackman argues that freeing Fannie and Freddie from federal conservatorship could remove approximately $8 trillion in liabilities from the government's balance sheet [6] - This move is seen as a way to transform a crisis-era burden into a significant success story for taxpayers in financial history [6] - The final component of Ackman's plan is to relist the stocks on the New York Stock Exchange, which would enhance liquidity for institutional investors [8]