- Hedge fund billionaire Bill Ackman ‘absolutely’ would consider Elon Musk’s X for his new investment vehicle Fortune
- Bill Ackman Tweets a Lot of Big Ideas. His Biggest Might Be Combining With Twitter Itself. – WSJ The Wall Street Journal
- Bill Ackman reportedly said he would ‘absolutely’ do a deal with X with his new SPARC funding vehicle CNBC
- Billionaire investor Bill Ackman would consider deal with Elon Musk’s X: report New York Post
- Bill Ackman would ‘absolutely’ consider SPARC deal with Elon Musk’s X: report MarketWatch
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Tag Archives: Ackman
Bill Ackman warns US economy headed for ‘train wreck’ after latest Fed rate hike – Fox Business
- Bill Ackman warns US economy headed for ‘train wreck’ after latest Fed rate hike Fox Business
- Ackman Warns of Accelerated Deposit Outflows After Fed Decision Bloomberg
- ‘Banks Are Melting’—Elon Musk Sends Warning To Joe Biden And The Fed Amid Wild Bitcoin, Ethereum And Crypto Price Swings Forbes
- Ackman on banking crisis, Fed hikes, Musk, Dimon, inflation, blockchain Markets Insider
- Elon Musk says Jerome Powell is so bad at his job that GPT-4 would be a better Fed chair: ‘This foolish rate hike will worsen depositor flight’ Yahoo Finance
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Bill Ackman is ‘extremely concerned’ about financial contagion risk ‘spiraling out of control’ after First Republic rescue – Fortune
- Bill Ackman is ‘extremely concerned’ about financial contagion risk ‘spiraling out of control’ after First Republic rescue Fortune
- ‘We need to stop this now.’ First Republic support is spreading financial contagion, says Ackman. MarketWatch
- Elon Musk Reacts As Bill Ackman Flags First Republic’s Risk Spreading To Largest Banks: ‘…Astounding’ – Benzinga
- Bewitched: The Bloomberg Open, Americas Edition Bloomberg
- Why Bill Ackman fears First Republic rescue threatens banks, economy Markets Insider
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Bill Ackman to wind up SPAC, return $4 billion to investors
Bill Ackman during a Bloomberg Television interview on 1 November 2017. Billionaire investor William Ackman, who had raised $4 billion in the biggest-ever special purpose acquisition company (SPAC), told investors he would be returning the sum after failing to find a suitable target company to take public through a merger.
Christopher Goodney | Bloomberg | Getty Images
Billionaire investor William Ackman, who had raised $4 billion in the biggest-ever special purpose acquisition company (SPAC), told investors he would be returning the sum after failing to find a suitable target company to take public through a merger.
The development is a major setback for the prominent hedge fund manager who had initially planned for the SPAC to take a stake in Universal Music Group last year when these investment vehicles were all the rage on Wall Street.
In a letter sent to shareholders on Monday, Ackman highlighted numerous factors, including adverse market conditions and strong competition from traditional initial public offerings (IPOs), that thwarted his efforts to find a suitable company to merge his SPAC with.
“High quality and profitable durable growth companies can generally postpone their timing to go public until market conditions are more favorable, which limited the universe of high-quality possible deals for PSTH, particularly during the last 12 months,” said Ackman, referring to the ticker symbol for his SPAC.
In July 2020, Pershing Square Tontine raised $4 billion in its initial public offering and wooed prominent investors ranging from hedge fund Baupost Group, Canadian pension fund Ontario Teachers and mutual fund company T. Rowe Price Group.
SPACs, also known as blank-check companies, are publicly-listed shells of cash that are created by large investors — known as sponsors — for the sole purpose of merging with a private company. The process, which is similar to a reverse merger, takes the target company public.
SPACs peaked during 2020 and the early part of 2021, helping rake in paper gains worth hundreds of millions of dollars for a number of prominent SPAC creators like Michael Klein and Chamath Palihapitiya.
However, over the past year, companies that merged with SPACs have performed poorly, forcing investors to shun blank-check deals. That coupled with tighter regulatory scrutiny and a downturn in equity markets have practically shut down the SPAC economy, with several billions of dollars at stake.
Moreover, the record-breaking performance of regular IPOs in the United States in 2021 posed competitive challenges for SPAC sponsors like Ackman, as several richly valued startups chose to list their shares on exchanges through traditional routes instead.
“The rapid recovery of the capital markets and our economy were good for America but unfortunate for PSTH, as it made the conventional IPO market a strong competitor and a preferred alternative for high-quality businesses seeking to go public,” Ackman said.
In July last year, Ackman’s efforts to take a 10% stake in Universal Music, which was being spun off by French media conglomerate Vivendi, through his SPAC were derailed due to regulatory hurdles. The U.S. Securities and Exchange Commission objected to the deal and Ackman put the investment into his hedge fund instead.
“While there were transactions that were potentially actionable for PSTH during the past year, none of them met our investment criteria,” Ackman said.
Ackman gives up on Netflix, taking $400 mln loss as shares tumble
April 20 (Reuters) – Billionaire investor William Ackman liquidated a $1.1 billion bet on Netflix (NFLX.O) on Wednesday, locking in a loss of more than $400 million as the streaming service’s stock plunged following news that it lost subscribers for the first time in a decade.
Ackman’s hedge fund Pershing Square Capital Management made an abrupt U-turn, selling the 3.1 million shares it had bought just three months ago as Netflix’ shares tumbled 35% to $226.19.
In January, the investor funneled over $1 billion into the streaming service just days after a disappointing forecast for subscriptions pushed the share price lower. Now a second bout of negative news about subscribers – the company said it had lost 200,000 – prompted the fund manager to turn his back on a company he had showered with praise only weeks before.
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In a brief statement announcing the move, Ackman said proposed business model changes, including incorporating advertising and going after non-paying customers, made sense but would make the company too unpredictable in the short term.
“While Netflix’s business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” he wrote.
Pershing Square, which now invests $21.5 billion, buys shares in only about a dozen companies at a time and needs a “high degree of predictability” in its portfolio companies, Ackman said.
Rather than wait around for things to improve at Netflix, Ackman locked in losses that are calculated to be more than $400 million, people familiar with the portfolio said. After the sale, Pershing Square’s portfolios are off roughly two percent for the year, Ackman said.
Netflix said it had lost 200,000 subscribers in its first quarter, falling well short of its modest predictions that it would add 2.5 million subscribers. Its decision in early March to suspend service in Russia after it invaded Ukraine resulted in the loss of 700,000 members. read more
Profitable hedges helped Pershing Square survive the early days of the pandemic in 2020 and then again in recent months as interest rates began to rise. The last three years have been among the best in the hedge fund’s lifetime, including a 70.2% gain in 2020.
But Ackman also acknowledged in his statement on Wednesday that he had learned from leaner times when his fund backed Valeant Pharmaceuticals, a disastrous bet that cost the hedge fund billions in losses.
“One of our learnings from past mistakes is to act promptly when we discover new information about an investment that is inconsistent with our original thesis. That is why we did so here,” he wrote.
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Reporting by Svea Herbst-Bayliss with additional reporting by Tiyashi Datta in Bengaluru; Editing by Sriraj Kalluvila, Bernard Orr
Our Standards: The Thomson Reuters Trust Principles.
Bill Ackman Sells All Netflix Stock As Billion-Dollar Bet Flops – The Hollywood Reporter
Bill Ackman, the Pershing Square Capital Management founder who less than three months ago bought $1.1 billion in Netflix stock, has sold his entire stake in the company at a major loss, the activist investor disclosed on Wednesday.
“While we have a high regard for Netflix’s management and the remarkable company they have built, in light of the enormous operating leverage inherent in the company’s business model, changes in the company’s future subscriber growth can have an outsized impact on our estimate of intrinsic value,” Ackman wrote in a letter to shareholders of Pershing. “In our original analysis, we viewed this operating leverage favorably due to our long-term growth expectations for the company.”
The move is an about face for Ackman, who made a big buy in the company in January, and lauded Netflix in Pershing’s March 29 annual report as a company that is “is well positioned as a leading beneficiary of the long-term secular growth in streaming, a high-quality business overseen by a world-class management team.” In the same report less than a month ago, Ackman added: “We believe Netflix’s current valuation represents a meaningful discount to intrinsic value for a business of its quality and exceptional growth potential.”
If Pershing bought 3.1 million shares of Netflix stock at its closing price of $359.70 a share on Jan. 26 for $1.1 billion, when the company closed at $226.19 on Wednesday, those shares would be worth about $700 million.
The sale arrives a day after Netflix disclosed that it had lost 200,000 subscribers in its latest quarter, bringing its total number of global members to 221.64 million. More distressing to Wall Street was guidance that the streaming giant expected to lose an additional 2 million subscribers in its next quarter. “I know it’s disappointing for investors, and it is for sure,” co-CEO Reed Hastings told analysts on an earnings call on April 19, adding that “we’re super focused” on “getting back into our investors’ good graces.”
As part of winning back investors, Netflix executives unveiled plans to not only crack down on password sharing, but also eventually introduce a cheaper, advertising-supported tier of the service and continue its expansion into becoming a video game streaming service. Wall Street wasn’t impressed and Netflix stock fell a steep 35 percent on Wednesday as multiple analysts issued downgrades to the stock target price.
Ackman, in his letter, applauded Netflix’s efforts but said that it wasn’t enough to hold the stock. “While Netflix’s business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company’s future prospects with a sufficient degree of certainty,” the activist investor wrote on Wednesday. “Based on management’s track record, we would not be surprised to see Netflix continue to be a highly successful company and an excellent investment from its current market value.”
Bill Ackman calls for the Fed to start raising interest rates ‘as soon as possible’
Bill Ackman, founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC
Billionaire hedge fund manager Bill Ackman called Friday for the Federal Reserve to begin reining in the support it has provided for the U.S. economy during the pandemic.
In separate tweets, the head of Pershing Square Holdings, with $13.1 billion under management, said the central bank should start turning off the monetary juice right away.
He teed up his position by saying he met last week with officials at the Fed’s New York branch, which houses the trading desk that carries out the wishes of officials regarding interest rates and the monthly asset purchase program.
“The bottom line: we think the Fed should taper immediately and begin raising rates as soon as possible,” he said.
“We are continuing to dance while the music is playing,” he added, “and it is time to turn down the music and settle down.”
The statements come just a few days before the Federal Open Market Committee is set to begin its two-day policy meeting Tuesday.
For Ackman, insisting on the taper isn’t anything radical: Investors widely expect the FOMC on Wednesday to announce that it soon will start pulling back on its monthly asset purchase program in which the Fed is buying at least $120 billion of bonds. Markets are looking for monthly pullbacks of $10 billion in Treasurys and $5 billion in mortgage-backed securities, possibly starting in November and concluding in the summer of 2022.
Calling for interest rate hikes is another matter.
Fed officials have stressed that the initiation of tapering shouldn’t be construed as a path to rate hikes. The Fed has been holding its benchmark overnight borrowing rate near zero since the early days of the Covid-19 pandemic, and most FOMC officials have indicated that the first increase won’t come sooner than late-2022.
However, traders lately have been pricing in more aggressive moves, with futures contracts pointing to at least two quarter-percentage-point 2022 rate hikes, beginning in June, according to the CME’s FedWatch tool. There’s also just shy of a 50-50 chance of another increase coming in December. The recent anticipation for hikes comes with inflation running around a 30-year peak.
Ackman said he’s beginning to position his portfolio for higher rates.
“As we have previously disclosed, we have put our money where our mouth is in hedging our exposure to an upward move in rates, as we believe that a rise in rates could negatively impact our long-only equity portfolio,” he tweeted.
Pershing Square is up 15.7% gross in 2021 and 12.2% net of fees this year, lagging the S&P 500’s 22.5% return, according to company statements. That comes after a stellar 2020 during which the fund returned 70.2% on net. The firm has attracted about $1.3 billion of additional assets this year.
—CNBC’s Yun Li contributed to this report.