Bill Ackman Backs Trump's Plan for Unified Fannie Mae and Freddie Mac Under Ticker 'MAGA'

President Trump hints at merging Fannie Mae and Freddie Mac and trading them under the ticker "MAGA." Hedge fund manager Bill Ackman supports the idea, suggesting it could lower mortgage rates and generate synergies. The proposal comes after Trump's earlier indications of plans to return the firms to public ownership, which could have significant implications for the mortgage market and broader financial sector.

President Trump has hinted at merging U.S. government-sponsored enterprises Fannie Mae and Freddie Mac, suggesting they could be traded under the ticker "MAGA." The proposal comes after earlier indications of plans to return the firms to public ownership, which could have significant implications for the mortgage market and broader financial sector.

Hedge fund manager Bill Ackman supports the idea, suggesting that a merger could reduce costs, risks, and oversight, potentially passing savings to consumers in the form of lower mortgage rates. Ackman, who has held stakes in Fannie and Freddie for over a decade, believes that combining the two entities would achieve huge synergies in their operations and trading price [1].

The Trump administration has been considering an initial public offering (IPO) for Fannie Mae and Freddie Mac by the end of the year, aiming to raise approximately $30 billion. The potential valuation of these companies is estimated at a combined $500 billion or more [2]. The administration is weighing the options, including the possibility of merging the two entities, as suggested by Ackman.

The over-the-counter shares of Fannie Mae (FNMA) and Freddie Mac (FMCC) have seen significant increases following the report, with Fannie Mae's shares rising by 21% and Freddie Mac's shares jumping by 15% on Friday [2]. The year-to-date performance has been even more impressive, with Fannie Mae's shares up by over 190% and Freddie Mac's shares up by 130% [2].

The proposed IPOs have drawn attention from prominent Wall Street banks, including JPMorgan Chase (JPM), Goldman Sachs (GS), Bank of America (BAC), Citigroup (C), Morgan Stanley (MS), and Wells Fargo (WFC), who have visited Washington, D.C., to discuss the plans with President Trump [2]. The meetings have included Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and Bill Pulte, director of the Federal Housing Finance Agency, which oversees Fannie and Freddie [2].

The potential IPOs and possible merger of Fannie Mae and Freddie Mac represent a significant shift in the U.S. housing market. The administration's plans are still in the early stages, and many details remain uncertain. As the process unfolds, investors and financial professionals will closely monitor the developments to understand their potential impact on the mortgage landscape.

References:
[1] https://finance.yahoo.com/news/investor-bill-ackman-proposes-combining-141524139.html
[2] https://www.ainvest.com/news/trump-fannie-mae-freddie-mac-ipo-plan-potential-solution-mortgage-rates-2508/