Two of the most heavily debated stocks on Wall Street just had their best single day in over a decade.

And they're still getting crushed.

What Happened

Ackman - the billionaire investor behind Pershing Square Capital Management - posted on X over the weekend that Fannie Mae and Freddie Mac were massively undervalued. His firm holds the largest private-sector position in both companies.

He argued the pair could multiply tenfold from current levels. He framed current prices as a rare chance to pick up top-tier businesses at a steep discount.

Investors listened. Fannie rocketed 51% on Monday. The last time the stock moved that much in one session was August 2009.

Freddie followed with a 47% gain - a rally it hasn't matched since early 2013.

Both names are still trading at less than half of where they peaked back in September.

The Bull vs. Bear Case

That September peak came on the back of reports that the White House was working on a plan to take the companies public. The price tag floated around was $500 billion or higher, with the government looking to sell a small piece and pocket around $30 billion.

Since then, confidence has faded.

On the bearish side, KBW analyst Bose George thinks the odds of the government actually letting go of these companies are shrinking. He also flagged a risk most retail investors miss - even if an IPO happens, the Treasury's preferred shares - basically debt the government holds that gets paid back before regular stockholders - would likely convert into common stock. That would water down existing shareholders in a big way.

On the bullish side, Wedbush analyst Henry Coffey thinks the offering is still very much alive - just moving slower than expected. He sees a clearer road once the conflict with Iran wraps up, energy costs and mortgage rates come back down, and the November midterms are in the rearview.

Worth Knowing

These two companies have been under government control since the 2008 housing crash - nearly 18 years now. Ackman laid out a faster route back in November that involved relisting the stocks on the NYSE and restructuring the Treasury's ownership stake. He pitched it as something that could happen right away, skipping the longer process of winding down government control entirely.

Not everyone's buying it. Investor Michael Burry weighed in last week, calling any offering a 2027 event at the earliest. He pointed to the war with Iran and a weak housing backdrop as major headwinds.

What to Watch

The gap between where Ackman sees these stocks heading and where they actually trade is enormous. Closing it depends on Washington - and Washington hasn't moved yet.