Michael Burry, known for his role in predicting the subprime mortgage crisis, is now investing in the prospects of Fannie Mae and Freddie Mac. In a recent post on Substack, Burry announced that he owns significant positions in both companies’ common stock and believes their initial public offerings (IPOs) are on the horizon.
Burry, who gained fame for his foresight during the 2008 financial crisis, stated that the two mortgage giants are essential to the U.S. housing market, holding approximately 62% of outstanding home loans. Reflecting on their history, he noted that both companies contributed to the housing bubble by acquiring risky loans, which ultimately led to their downfall during the crisis. In his analysis, Burry emphasized that he recognized these dangers early, even labeling Freddie Mac as “Frauddie Mac” in a 2003 investor letter and investing in credit-default swaps to hedge against potential failures.
As of 2025, Burry argues that the financial landscape has shifted. Both Fannie Mae and Freddie Mac have rebuilt their capital reserves, accumulating tens of billions since 2021. With the Trump administration showing interest in releasing these entities from government conservatorship, Burry is optimistic about their forthcoming IPOs. He stated, “Once each company is released from capital restraint by their IPOs, I expect growth to accelerate naturally.”
Despite this optimism, Burry cautioned that several regulatory and policy hurdles remain before the IPOs can materialize. He described the path as “a final steep, windy and rocky climb.” Shares of Fannie Mae and Freddie Mac, which currently trade over the counter, experienced increases of 2% and 2.4% respectively, in response to Burry’s announcement.
Burry’s insights come shortly after he closed his hedge fund, Scion Asset Management, to outside investors and ended its registration with the Securities and Exchange Commission (SEC). He has since launched his Substack newsletter, titled “Cassandra Unchained,” which aims to provide subscribers with a comprehensive view of his market analyses and projections. The newsletter has garnered over 146,000 subscribers, indicating significant interest in his market perspectives.
As Fannie Mae and Freddie Mac approach a potential return to public markets, Burry’s investment underscores the evolving dynamics of the mortgage industry and the lasting impact of past financial crises.
