Bill Ackman blasted the U.S. Treasury’s handling of Fannie Mae and Freddie Mac on Sunday, arguing the government rewrote the rescue terms through the Net Worth Sweep and diverted all quarterly profits to itself even after the companies had already repaid the bailout. Earlier, in separate remarks calling the trade his top idea for 2026, Ackman outlined a step-by-step path to exit conservatorship that he said could stabilize housing finance and deliver substantial returns for taxpayers.
In a lengthy post on X, Ackman outlined his central argument, saying shareholders are not seeking a “gift” from Washington but are instead asking the government to honor the original senior preferred stock agreement and properly account for the payments.
He contrasted the 2008-era bank rescues, citing a 5% coupon plus warrants equal to 15% of face value, including a $10 billion Treasury investment in Goldman Sachs with warrants on $1.5 billion of common stock, with what he described as harsher terms imposed on the two mortgage firms.
Ackman said Treasury’s support for the pair totaled $193 billion in senior preferred stock, plus $2 billion of commitment fees, carrying a 10% coupon and accompanied by warrants for 79.9% of each company. He added that the companies have paid Treasury $301 billion, which he said includes a blended 11.6% interest rate and full return of the $193 billion principal, plus $25 billion more than the contract required.
Why Ackman’s Push For Fannie Freedom Matters
Ackman argued the accounting outcome is upside down: despite the $301 billion he says has been sent back, the $193 billion senior preferred stock still sits as if it were never reduced. He tied that to the Net Worth Sweep, describing it as the mechanism that treated every dollar as a dividend rather than repayment, preventing any principal reduction from being recognized.
He pointed to Aug. 12, 2012—during Barack Obama‘s second term—as the moment Treasury changed the deal, swapping the 10% dividend for a claim on all profits each quarter. As reported by X, Ackman said the move came after the companies returned to profitability and was done unilaterally, not as a negotiated resolution.
In Ackman’s telling, the sweep quickly produced extreme outcomes, including a quarter where Fannie Mae earned $59 billion and the dividend for that period was set to the same amount, sending the entire profit to the government. He also wrote that he discussed the situation with Warren Buffett about a decade ago and Buffett said he “couldn’t believe what the government had done.”
Alongside the critique, Ackman has been pushing a “walk before you run” blueprint aimed at ending what he has described as an 18-year conservatorship that began after the 2008 crisis. That approach includes relisting the companies first, then using a multi-year window to settle capital rules and leadership structure before a fuller privatization effort.
Are Shareholders Asking For Government Handouts?
Ackman’s answer is no: he said shareholders are seeking enforcement of the original senior preferred stock terms, not a new subsidy. He argued Treasury can keep or return the extra $25 billion, but the government should eliminate the senior preferred liability by crediting the payments already made.
He also warned that if conservatorship can be used to reorder claims with “the stroke of a pen,” private investors will be reluctant to provide rescue capital to troubled institutions. Ackman linked that concern to post-crisis bank failures such as Silicon Valley Bank, arguing the precedent makes private capital harder to attract when a firm is under stress.
In place of sweeping profits, Ackman has argued a clean exit could produce a large payoff for the government if the companies trade like conventional financial firms again. He has projected 300% to 400% upside for the shares if reprivatization happens, using a framework that values Fannie and Freddie at 16x and 13x estimated 2026 earnings, respectively.
The $301 Billion Payment That Changes Everything
Ackman framed the $301 billion figure as the hinge point: he said it exceeds what was owed and should have cleared the senior preferred stock balance from the books. Instead, he argued, the Net Worth Sweep structure ensured the payments were booked as dividends, leaving the senior preferred stock standing as an ongoing claim.
He also criticized ideas that would convert the senior preferred stake into junior preferred and common equity, saying that could push the government’s ownership toward roughly 95% from 79.9% while making the companies less investable. Ackman argued that a smaller stake in companies investors trust could be worth more to taxpayers than a larger stake obtained through heavy dilution.
In his post, Ackman cited a November 2021 letter from Donald Trump to Rand Paul that labeled the sweep “theft” and called the episode “a travesty” while urging it to end. Ackman closed by urging Trump to act, writing, “Now that you have the time, Mr. President, let’s Stop the Steal!”
Strategic Investments in AI and Value Creation
In earlier statements, Ackman revealed that his fund, Pershing Square Capital, took a new stake in Meta Platforms, acquiring 2,673,569 shares, while also increasing its position in Amazon. This move aligns with his belief that Meta’s share price does not reflect its long-term potential, particularly in the rapidly growing AI sector, where the company continues to thrive with 3.5 billion daily active users.
This strategic shift in Ackman’s portfolio highlights his ongoing investment strategy as he seeks to navigate a challenging economic landscape, underscoring the importance of focusing on companies with strong fundamentals. As he argues for the need to enforce original terms with the Treasury regarding Fannie Mae and Freddie Mac, this context illustrates his broader investment philosophy that prioritizes value creation for shareholders.
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