Shares of Fannie Mae and Freddie Mac surged at Friday's open, following remarks from former President Donald Trump suggesting the mortgage finance giants could be worth as much as $1 trillion.
However, the stocks later reversed course and turned negative as market skepticism grew.
The comments were made by Trump during a White House speech on Thursday afternoon that was ostensibly focused on the coal industry.
Earlier in the week, shares of both companies had declined after Trump appointed Federal Housing Finance Agency (FHFA) Director Bill Pulte to serve as acting Director of National Intelligence.
That appointment raised market concerns about the established plan for the government to sell its stakes in the companies.
"We are comfortable with the valuation figures that have been published recently," said KBW analyst Bose George on Friday.
"The combined fair value for the two companies is currently in the range of $200 to $250 billion."
On Friday, shares of Fannie Mae (FNMA) rose as much as 10.4%, while Freddie Mac shares gained up to 9.7%, before both retreated into negative territory.
Year-to-date, both stocks are down more than 30%, as the market grows increasingly uneasy about the prospects for the Trump administration to advance an IPO.
There is significant market doubt regarding the likelihood of the government truly relinquishing control and freeing the companies from conservatorship.
Both have been under government control since the U.S. housing market collapse triggered the financial crisis.
In a recent report, Wedbush analyst Michael Piccolo wrote that Pulte's appointment as acting DNI "further supports our view that substantive 'IPO' action, such as a Treasury sale of the common stock it would receive upon warrant exercise, is unlikely before the 2026 midterm elections."
He questioned whether Pulte would have the bandwidth to advance the complex regulatory and recapitalization work needed to release the companies, adding the appointment could be part of future leadership changes at the FHFA.
Previously, optimism about an impending stake sale had driven significant gains for Fannie and Freddie in 2025.
Last August, reports suggested the White House was planning to push for a public offering that could value the enterprises at $500 billion or more, aiming to raise roughly $30 billion by selling a 5% to 15% stake.
In March, investor Bill Ackman, who has a large position in both companies, described the mortgage giants as "ridiculously cheap."
Despite this, Christopher Maloney, a mortgage strategist at BOK Financial, stated on Friday he does not believe he will see Fannie Mae and Freddie Mac exit government conservatorship, at least not in his lifetime.
He cited multiple reasons, including the companies' complex legal status, a lack of political capital to effect such a change, and concerns about the potential impact on the U.S. mortgage market.
"Let's not forget, Fannie Mae was created as a government agency under the New Deal," Maloney said.
"Returning these government-sponsored enterprises (GSEs) to being part of the government wouldn't be a massive change; it would just be a return to their roots."
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