Privatization after Bailout: Can Fannie Mae FNMA & Freddie Stock Reach $70?
Fannie Mae and Freddie Mac stock soared to multi-year highs after President Trump renewed calls for the companies' long-awaited privatiz...
Quick overview
- Fannie Mae and Freddie Mac shares surged by over 30-40% after Donald Trump expressed serious consideration for their privatization.
- The stocks reached their highest levels since the 2008 financial crisis, with Fannie Mae rising from $7.45 to nearly $11 and Freddie Mac from $5.67 to over $8.
- Trump's renewed interest in removing the government-sponsored enterprises from conservatorship has reignited investor enthusiasm, particularly among retail traders.
- Despite the rally, both stocks remain significantly below their pre-crisis highs, indicating substantial upside potential if privatization occurs.
Fannie Mae and Freddie Mac stock soared to multi-year highs after President Trump renewed calls for the companies’ long-awaited privatization.
Stocks Soar on Privatization Buzz
Shares of Fannie Mae (FNMA) and Freddie Mac (FMCC), traded over the counter, exploded higher by more than 30–40% today, hitting their strongest levels since the 2008 financial crisis. Fannie Mae surged from $7.45 to nearly $11, while Freddie Mac jumped from $5.67 to over $8. These dramatic moves came after former U.S. President Donald Trump declared he is “very seriously considering” removing the government-sponsored enterprises from conservatorship — a system they’ve been under since the housing market collapse nearly two decades ago.
A Long-Awaited Exit from Conservatorship
Originally designed as government-created entities with private shareholder structures, Fannie and Freddie were pulled under federal control in September 2008 following massive losses linked to the housing market crash. While the government stepped in to stabilize the mortgage market, critics argue that ordinary Americans were left footing the bill. The U.S. Treasury still holds preferred shares and warrants for up to 80% of their common stock — a legacy of the bailout.
Trump’s announcement marks his second attempt to free the mortgage giants from government control, after a failed push during his first term in 2019. His renewed interest has reignited investor enthusiasm, particularly among retail traders who view the potential public listing of these entities as a generational opportunity.
Historical Perspective and Upside Potential for FNMA Shares 
While today’s rally is dramatic, both stocks remain shadows of their former selves. In 2007, before the crisis, Fannie Mae shares traded above $70 and Freddie Mac shares over $70 as well. By those standards, Fannie Mae, now near $10, would need to climb over 700% to revisit pre-crisis highs. Freddie Mac, around $7.70 today, faces nearly a 1,000% uphill climb to reclaim its past valuation.
A Political and Market Turning Point?
Republican lawmakers, including President Trump allies, have long pushed for an end to the government’s grip over the two mortgage giants. The current rally underscores renewed optimism that the political climate — combined with Trump’s second-term ambitions — may finally lead to meaningful structural change. If that happens, investors are betting these beaten-down OTC stocks could reclaim a spot in the public markets and potentially deliver outsized returns.
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