Michael Burry, the investor made famous by The Big Short, says the charts of Fannie Mae and Freddie Mac now point to worthless stock. Less than a year ago, he disclosed sizable stakes in both mortgage giants.

The two companies back a large share of US home loans and have been under government control since the 2008 crisis. Their shares soared after Donald Trump’s 2024 election win on bets he would set them free.

How Far Fannie and Freddie Shares Have Fallen

Fannie Mae closed at $1.39 on Election Day 2024, according to Yahoo Finance data. It peaked at $15.31 on September 11, 2025, and closed Friday at $4.04.

Federal National Mortgage Association (FNMA) Stock Performance. Source: Yahoo Finance

That is a 74% drop from the top, erasing about 80% of the post-election rally. Freddie Mac followed the same path, from $1.20 to $14.15 and back to $3.68.

In a Sunday newsletter post, Burry said both stocks had formed a head-and-shoulders top, a chart shape traders read as the end of a rally.

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

Burry said he made a move in both stocks this week. The direction of that trade sits behind his paywall. In December 2025, he told readers he expected public listings to lift both shares.

Why Burry Says Common Shareholders Could Lose 90%

The risk lies in the 2008 bailout. Treasury holds senior preferred stock, a class of shares that must be repaid before ordinary shareholders see anything. That repayment claim grows every quarter.

Pointing to share prices and commentary from investment bank KBW, Burry said Wall Street increasingly expects Treasury to convert that stake into common stock. He estimates the swap would shrink existing holders’ share of the company by at least 90%.

He also said the summer punished most stocks outside the AI trade. In his view, the share of stocks joining the rally is shrinking toward levels last seen near 2000.

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

Burry has written that common holders need two things, an end to government control and a sharp cut to Treasury’s claim. Neither has happened yet, and both depend on decisions in Washington.

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