Burry Warns Fannie Mae and Freddie Mac Stocks Could Become Worthless

The Big Short investor Michael Burry now says the price patterns of Fannie Mae and Freddie Mac indicate the shares may be headed for worthlessness. It was under a year ago that he revealed large positions in both home-loan companies.

Fannie and Freddie guarantee a substantial portion of American mortgages and have stayed in government conservatorship ever since the 2008 meltdown. Following Trump’s 2024 victory, their stocks jumped on expectations that they would be released from that control.

How Much the Fannie and Freddie Shares Have Dropped

On Election Day 2024, Fannie Mae finished at $1.39, as tracked by Yahoo Finance. The stock reached a high of $15.31 on September 11, 2025, and stood at $4.04 at Friday's close.

That represents a 74% decline from its peak, wiping out roughly 80% of the gains made after the election. Freddie Mac mirrored the pattern, moving from $1.20 to $14.15 and then falling back to $3.68.

Writing in his newsletter on Sunday, Burry noted that each stock had produced a head-and-shoulders top, a technical pattern that traders interpret as a rally's exhaustion.

“What that chart predicts, technically, is worthless stock,” Burry wrote.

Burry also stated that he had taken a position in both stocks during this week. The details of that move are reserved for his paying subscribers. In December 2025, he had told his audience that he anticipated public listings to push both stocks higher.

Why Burry Says Common Holders Could Face 90% Losses

The danger stems from the 2008 rescue. The Treasury owns senior preferred shares, a type of security that takes priority over common stock when it comes to payouts. The amount owed to the government expands each quarter.

Citing the share levels and analysis from investment bank KBW, Burry indicated that Wall Street is more and more anticipating the Treasury to convert its holding into common equity. He calculates that such a conversion would reduce the ownership of current shareholders by no less than 90%.

New X article. This past week I made a move in both Fannie Mae & Freddie Mac. Both stocks have retraced essentially all their gains since Trump’s election, and they put in a giant head-and-shoulders-and-elbows top for added emphasis. https://t.co/v3la5ffCUk

— Cassandra Unchained (@michaeljburry) October 11, 2026

Burry added that the summer months hit many stocks that were not part of the AI surge. He sees the proportion of equities taking part in the rally as falling to readings reminiscent of the period around 2000.

This caution follows his pronouncement earlier in the week that Anthropic’s valuation is a bubble. Days before that, he said stocks are in denial, as before the 2000 and 2008 crashes.

Burry has written that ordinary shareholders require two conditions: termination of government conservatorship and a significant reduction of the Treasury’s claim. Neither has occurred so far, and each hinges on choices made in Washington.