Michael Burry Bets on Fannie Mae’s Return to Public Markets

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Speculation that the mortgage finance giant could soon exit government control has gained a notable backer. Investor Michael Burry, famed for his prescient bet against the U.S. housing market, has taken a significant long position in the company's common stock. This move coincides with Fannie Mae's operational relocation and aggressive balance sheet growth, fueling debate over a potential end to its long conservatorship.

Michael Burry, whose investment strategy was chronicled in "The Big Short," has publicly expressed confidence in an imminent relisting for Fannie Mae. He contends that while the regulatory path remains complex, it is becoming clearer. Key prerequisites, according to Burry, include relaxed capital requirements and a resolution of the government's claims stemming from its preferred shares.

The stock, which traded near $10.85 on Wednesday, has surged almost 300% year-to-date despite a recent pullback of approximately 9% last week. Burry's analysis and investment have injected fresh optimism into the market narrative.

Operational Shifts and Financial Strategy

Supporting this outlook are concrete corporate actions. Fannie Mae has confirmed it is moving its operational base from San Francisco, California, to Birmingham, Alabama—a shift widely viewed as a cost-cutting measure and a strategic departure from its previous geographic footprint.

More impactful financially is the dramatic expansion of its portfolio. Data reveals that Fannie Mae, alongside Freddie Mac, has increased its holdings of mortgage-backed securities and loans by over 25% in the past five months. The combined portfolio now stands at nearly $234 billion, its highest level since 2021. Market observers interpret this aggressive growth as a tactic to boost profitability and enhance the enterprise's appeal to private investors ahead of a potential public offering.

Significant Hurdles to Clear

Fannie Mae has operated under federal conservatorship since the 2008 financial crisis. Although the current administration has signaled intent to return the mortgage financiers to private markets, a substantial capital shortfall persists as the core challenge. The company holds over $105 billion in equity but continues to fall short of the full regulatory capital requirements needed for independence.

Investors are now focused on potential regulatory announcements concerning a relisting, which analysts suggest could be evaluated by late 2025 at the earliest. From a technical perspective, the stock's price currently finds support at $10.33, with resistance awaiting at $11.29. The company's next quarterly results are anticipated in February 2026.