Mizuho Securities analyst Dan Dolev noted that, following a period of relative quiet in discussions surrounding Fannie Mae (FNMA.US) and Freddie Mac (FMCC.US), investors are underestimating the possibility of these two mortgage giants returning to the public markets. Dolev initiated coverage on both companies this week with "Buy" ratings, based on a core assumption of a 30% probability for Fannie Mae and a 20% probability for Freddie Mac to exit government conservatorship before 2028. He stated that as tensions in the U.S.-Iran conflict ease, the Trump administration may prioritize the listing plans for these companies. Dolev emphasized in an interview, "The market is assessing their probability of going public before 2028 as too low; we believe the actual likelihood is somewhat higher." He added that with the easing of the Iran situation, "we will have more time to address this matter." Previously, expectations that the Trump administration might end the 17-year period of government control had driven the share prices of both companies higher in 2024-2025. However, prices have significantly retreated since the start of this year due to uncertainty over government plans—the over-the-counter traded shares of Fannie Mae and Freddie Mac have fallen nearly 50% from their highs last September. Dolev's "quick exit" scenario focuses on both companies, involving a 2.5% capital requirement and terms where government-held preferred shares are considered repaid before 2028. This scenario is most sensitive to outcome probability. In his May 4th report, he noted that for every 10-percentage-point increase in probability, Fannie Mae's weighted target price would rise by $3, and Freddie Mac's by $4. His current target price for Fannie Mae is $10 (approximately 25% above Thursday's closing price) and for Freddie Mac is $9 (about 26% above the prior closing price). Data shows he is the sixth analyst covering Fannie Mae and the fifth covering Freddie Mac. Dolev believes Fannie Mae and Freddie Mac possess extremely high business barriers and profitability, belonging to one of the rarest categories of high-quality assets in the capital markets. He emphasized that although these companies have been under the conservatorship of the Federal Housing Finance Agency (FHFA) since the 2008 financial crisis, political momentum for reforming the housing finance system is gathering again during the Trump administration's second term. The core of the current bullish argument lies in the rediscovery of asset scarcity and profitability. Fannie Mae and Freddie Mac essentially have quasi-monopolistic moats and very high return on equity (ROE). This "cash cow" attribute, under a normal market valuation framework, would command a P/E multiple far beyond what their current "zombie stock" status reflects. Dolev's viewpoint essentially poses a question to the market about "margin of safety": if the probability of a successful exit before 2028 is not zero, do the current share prices of just a few dollars offer sufficient odds to counterbalance policy uncertainty? Meanwhile, the companies have also attracted attention from other bullish voices on Wall Street. In March, fund manager Bill Ackman, who has persistently lobbied the White House to release the companies from conservatorship, called their valuations "ridiculously low." Michael Burry, known for *The Big Short*, while having previously referred to them as the "toxic twins," disclosed a bullish stance via Substack in early December, though he later stated an IPO "would be no earlier than 2027." However, uncertainty regarding the path to privatization remains a major pressure on the share price. FHFA Director Bill Pult reiterated on Wednesday that any potential IPO decision ultimately rests with President Trump. Dolev added, "I don't have a crystal ball, but if they do go public successfully, their value would far exceed current levels." The complexity of this situation lies in the restructuring of interests within their capital structure. The key takeaway for investors should not be limited to "whether they will go public" but should extend to "how they will go public." Currently, the warrant held by the U.S. Treasury acts like a Sword of Damocles over common shareholders. If the government chooses to exercise it in full, existing shareholder equity would be massively diluted. Conversely, if the government opts for a settlement more favorable to private capital to facilitate a smooth IPO, the current over-the-counter traded common shares could experience a Davis Double.