Bill Ackman is betting big on Fannie Mae and Freddie Mac

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Bill Ackman is betting big on Fannie Mae and Freddie Mac – once forgotten mortgage giants – and he claims the payoff could be enormous if the US government finally unwinds its rescue stakes. Fannie’s shares have soared more than 200 percent since the US election as Ackman touts a 1,200 percent surge from his entry price.

Still, sceptics point out that returning these firms to private hands will be messy and could create massive dilution for existing investors. The government first bailed them out for nearly $190 billion and still holds huge stakes, so any plan to privatise could face steep political hurdles.