Michael Burry Expects FNMA, FMCC To ‘Settle Back’ After Bill Ackman Sparked 50% Surge In ‘FOMO’ Trades

• FNMA and FMCC gained sharply on Monday, following comments from Bill Ackman and Michael Burry.
• Burry said he believes the rally will cool off soon.
• Stocktwits sentiment for both stock flips to ‘extremely bullish.’

Fannie Mae and Freddie Mac are generating significant buzz on Stocktwits following their sharp gains on Monday, although noted investor Michael Burry – who, along with a prominent billionaire hedge fund manager, is believed to have helped spark the rally – warns the stocks could cool off soon.

Pershing Square founder Bill Ackman called the mortgage-giant duo “stupidly cheap,” saying, “they could be a 10X and it could happen soon.” Burry echoed the sentiment, replying that he “cannot emphasize enough how rare this is in this market,” helping trigger a 51% and 47% surge in OTC-traded Fannie Mae and Freddie Mac shares, respectively.

“I’m shocked it is up this much, and would not be surprised to see it pull back meaningfully this week unless there is real news,” Burry said in the AMA section of his Substack post-trading hours, contending that Ackman’s remarks and FOMO-driven trading were behind the surge.

“I am sorry if I had anything to do with this pump. I was looking to buy more today too. Will be funny if I go down in history as the bear who crashed these stocks,” he said.

Fannie Mae and Freddie Mac have been in focus amid President Donald Trump’s push to support the U.S. housing market, which continues to grapple with a structural shortage of homes, elevated mortgage rates, and high construction costs. At his direction, the two firms have stepped up purchases of housing loans to help ease borrowing costs, and could also be exploring a potential public listing.

Retail’s View On FNMA, FMCC

On Stocktwits, the retail sentiment for FNMA flipped to ‘extremely bullish’ from ‘bearish,’ while the sentiment for FMCC shifted to ‘extremely bullish’ from ‘neutral.’ Both were seeing ‘extremely high’ message volume as traders.

“Two big fish making a splash. Name another investment opportunity where the companies are some of the most profitable and the biggest investors are on the side of retail,” remarked a user.

Fueling speculation, another user wrote: “Ackman and Burry tweet about Fannie and Freddie all the time, but there's never been a move like this. This is the admin buying on insider knowledge, something coming.”

Burry Loads Up Shares

On Monday, Burry also highlighted his view that Fannie Mae and Freddie Mac could perform better if government control over them is eased. The two were placed into conservatorship after suffering heavy losses during the 2008 mortgage crisis.

Burry has been eying the two companies for some time. He previously revealed that he had been buying both stocks on the way down, first when they fell to the $6-$7 range and again when they dropped into the $4s. 

But he tempered his near-term expectations. "I believe the IPO is now a 2027 proposition at best," he wrote earlier. "The Iran War seals it after the lukewarm reception on Wall Street. Higher rates may transmit to the mortgage market and impact an already shaky housing market."

Despite Monday’s surge, FNMA and FMCC stocks are down 32% and 37%, respectively, year to date.

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