Fannie Mae Plunges Amid Governance Turmoil

Fannie Mae shares are experiencing a severe selloff as a deepening governance crisis alarms investors, completely overshadowing the mortgage giant’s strong financial performance. A convergence of internal conflicts and market pressures has pushed the company toward a critical inflection point.

Activist Investor Steps In Amid Crisis

Billionaire Bill Ackman, whose firm is the largest shareholder, has responded to the market instability with a significant announcement. He plans to host a livestream on November 18th where he will present a new proposal for Fannie Mae and Freddie Mac. His stated objective is to maximize value for taxpayers, with a plan he believes can be finalized before the year ends.

Key Developments Driving the Selloff

• Heavy Selling Pressure: Shares plummeted over 10% on Wednesday, with declines continuing into the next trading session.
• Ethics Unit Dismantled: Approximately a dozen staff from the ethics and internal investigations division were terminated during a sensitive FHFA probe.
• Major Shareholder Intervention: Activist investor Bill Ackman has announced a public proposal for a new transaction.
• Strong Results Overlooked: The company reported Q3 2025 net revenues of $7.3 billion and a net income of $3.9 billion.

A Steep Share Price Decline

The market’s reaction was swift and severe. On Wednesday, Fannie Mae’s stock price crashed dramatically by approximately 10.5%, closing at around $9.57 after hitting an intraday low of $9.17. The negative momentum persisted into the following session, confirming a distinct downward trend that reflects profound investor anxiety.

Should investors sell immediately? Or is it worth buying Fannie Mae?

Core of the Crisis: Ethics Team Dismissed

At the heart of the turmoil is the shocking dismissal of roughly a dozen employees from Fannie Mae’s ethics and internal investigations unit. The terminations occurred while the team was actively examining allegations that senior officials at the Federal Housing Finance Agency (FHFA) had unlawfully directed staff to access mortgage data belonging to political figures. Among those let go was the Chief Ethics Officer, and simultaneously, the General Counsel resigned under pressure.

Robust Finances Obscured by Governance Fears

The current crisis of confidence is entirely eclipsing the company’s robust financial health. For the third quarter of 2025, Fannie Mae posted a net income of $3.9 billion on net revenues of $7.3 billion. The firm achieved an illustrative return on equity of 10.3% and increased its net worth to $105.5 billion. However, the market is wholly disregarding these solid fundamentals, focusing exclusively on the risks posed by the breakdown in corporate governance.