Core Viewpoint - The Trump administration is considering IPOs for mortgage giants Fannie Mae and Freddie Mac, but billionaire investor Bill Ackman argues that now is not the right time for the Treasury to sell its stakes in these firms [1][2][3]. Group 1: Proposed Strategy for Fannie Mae and Freddie Mac - Ackman suggests that the Treasury should cancel the government's senior preferred shares and exercise warrants to buy up to 79.9% of the common stock, relisting both companies on the New York Stock Exchange, which could generate approximately $300 billion for taxpayers [3][9]. - He believes that rushing into an IPO is a mistake and that these entities will be worth significantly more over time, emphasizing the need for a slow and steady approach to privatization [5][11]. - Ackman highlights the importance of resetting capital levels, establishing the right management teams, and ensuring that shareholders are excited about the companies before proceeding with an IPO [8][18]. Group 2: Financial Performance and Market Potential - Fannie Mae and Freddie Mac have paid back $301 billion to the government after receiving $191 billion in loans, resulting in a return of nearly 12%, exceeding the expected 10% [9][24]. - Ackman projects that the stocks could trade in the $40 range, leading to a market cap approaching $400 billion, which would represent significant value creation [10][11]. - He argues that the government should retain its 79.9% stake while allowing the companies to optimize their operations, particularly in the context of advancements in AI that could enhance efficiency and profitability [15][16]. Group 3: Regulatory and Market Considerations - Ackman calls for revised capital rules to allow the government-sponsored enterprises (GSEs) to earn adequate returns, noting that current capital requirements are excessively high [30][32]. - He emphasizes that raising guarantee fees to meet capital requirements would ultimately increase mortgage interest rates for borrowers, which is not desirable [33][34]. - By listing the companies on an exchange while they remain in conservatorship, Ackman believes it would create transparency and potentially lower mortgage spreads, benefiting the overall mortgage market [35][36].