Over-the-counter (OTC) shares of Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) jumped in premarket trading on Wednesday after U.S. President Donald Trump said he was working on taking the housing giants public in a post on Truth Social.
"I am working on TAKING THESE AMAZING COMPANIES PUBLIC, but I want to be clear, the U.S. Government will keep its implicit GUARANTEES, and I will stay strong in my position on overseeing them as President," Trump wrote in the post late on Tuesday.
Fannie and Freddie, which operate as for-profit corporations with private shareholders, were created by the U.S. Congress to expand the national home-lending market by buying home loans from private lenders and repackaging them as mortgage-backed securities.
Fannie shares rose 16.6% to $12.30, while Freddie gained 18.4% to $9 before the bell. Their shares last week hit the highest since 2008 after Trump said he was mulling a spinoff of the U.S. mortgage finance firms.
The United States Treasury owns preferred shares in the firms and warrants to purchase about 80% of their common stock.