(Reuters) – Over-the-counter (OTC) shares of Fannie Mae and Freddie Mac jumped on Wednesday after President Donald Trump said he was working on taking the housing giants public in a post on Truth Social. “I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its […]
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Fannie, Freddie OTC shares climb as Trump prepares to take firms public
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(Reuters) – Over-the-counter (OTC) shares of Fannie Mae and Freddie Mac jumped on Wednesday after President Donald Trump said he was working on taking the housing giants public in a post on Truth Social.
“I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President,” Trump wrote in the post late on Tuesday.
The Trump administration wants to end the long-standing conservatorship of Fannie Mae and Freddie Mac, which have been under the U.S. government’s control since 2008 after they suffered heavy losses during the subprime mortgage crisis.
Trump had tried during his first term to reduce government control.
Bill Pulte, director of the Federal Housing Finance Agency that regulates Fannie Mae and Freddie Mac, said on Wednesday he would hold a press conference at Fannie Mae alongside Palantir CEO Alex Karp to discuss “something Big” related to mortgage.
The regulator is expected to play a central role in any effort to return the pair, which back the majority of the nation’s residential mortgages, to the private sector.
Fannie’s shares rose 9.3% to $11.53, while Freddie gained 13.4% to $8.63. The shares, which don’t trade on major exchanges, hit their highest since 2008 after Trump said last week he was mulling a spinoff of the U.S. mortgage finance firms.
The United States Treasury owns preferred shares in the firms and warrants to purchase about 80% of their common stock.
The combined market value of the two companies was $17 billion as of last closing price. They have shot up more than five-fold in value over the past year, with most gains made around Trump’s 2024 U.S. election win.
Trump ally Bill Ackman’s Pershing Square Capital Management is the biggest holder of Fannie’s public OTC shares with about 10%, according to LSEG data. Capital Research Global Investors, a unit of the Capital Group, is among the top investors at Freddie and Fannie.
(Reporting by Medha Singh in Bengaluru; Editing by Shinjini Ganguli)