Bill Ackman (Pershing Square Capital Management) --- Let's Learn from His Missteps
Born in a rich Jewish family in 1966. His father is the chairman of a New York real estate financing firm, Ackman-Ziff Real Estate Group.
Net Worth $1.4B (Forbes, Feb 2017)
Harvard Univ. (BA 1988 & MBA 1992)
In 2005, Pershing bought a significant share in Wendy's and successfully pressured it to sell its Tim Hortons doughnut chain. Wendy's spun off Tim Hortons through an IPO in 2006 and raised $670M. After Ackman sold his shares at a substantial profit after a dispute over executive succession, the stock price collapsed.
By the end of 2007, Pershing owned a 10% stake in Target, valued at $4.2B. By the end of 2010, Pershing held a 38% stake in Borders, ignoring the rise of Amazon. None of these went well.
Ackman made a large profit during the financial crisis of 2008 by buying credit default swaps against MBIA corporate debt.
Ackman started buying JCP shares in 2010, paying an average of $22 for 39M shares or 18% of Penney's stock. Under his pressure, JCP tried to change the business model, but not focusing on e-commerce, which should be the trend. All the changes were proven disaster. After 3 years, he gave up at a price of $12.90/share, resulting in a loss of approximately $0.5B to Pershing Square.
In May 2012, Achman started to bet against Herbalife. He used all different ways to manipulate the stock price, but failed, ending up with another $0.5B loss by 2016 and law suits.
Pershing Square Holdings amounted to 22.2% in returns from Dec. 2012 to Dec. 2015 under Ackman’s management, 30% below the S&P 500.
In March 2017, Pershing took another huge hit on Valeant Pharmaceuticals, which story I covered in another post https://defeatmarket.blogspot.com/2017/09/citron-research-wolf-of-wall-street.html
He endorsed Michael Bloomberg as a prospective candidate for President of the United States in the 2016 presidential election. After Donald Trump became president, Ackman told The New York Times that he was "bullish" on Trump's presidency.
Net Worth $1.4B (Forbes, Feb 2017)
Harvard Univ. (BA 1988 & MBA 1992)
Early Career (Gotham Partners)
In 1992, Ackman founded the investment firm Gotham Partners with fellow Harvard graduate David P. Berkowitz, starting small investments in public companies. The fund grew to $500M by 1998. By 2002, Gotham Partners had become entrenched in litigation with various outside shareholders who also owned an interest in the same companies in which Gotham invested.Pershing Square Capital Management
In 2004, started with $54 million in funding from his personal funds and from his former business partner, Leucadia National.In 2005, Pershing bought a significant share in Wendy's and successfully pressured it to sell its Tim Hortons doughnut chain. Wendy's spun off Tim Hortons through an IPO in 2006 and raised $670M. After Ackman sold his shares at a substantial profit after a dispute over executive succession, the stock price collapsed.
By the end of 2007, Pershing owned a 10% stake in Target, valued at $4.2B. By the end of 2010, Pershing held a 38% stake in Borders, ignoring the rise of Amazon. None of these went well.
Ackman made a large profit during the financial crisis of 2008 by buying credit default swaps against MBIA corporate debt.
Ackman started buying JCP shares in 2010, paying an average of $22 for 39M shares or 18% of Penney's stock. Under his pressure, JCP tried to change the business model, but not focusing on e-commerce, which should be the trend. All the changes were proven disaster. After 3 years, he gave up at a price of $12.90/share, resulting in a loss of approximately $0.5B to Pershing Square.
In May 2012, Achman started to bet against Herbalife. He used all different ways to manipulate the stock price, but failed, ending up with another $0.5B loss by 2016 and law suits.
Pershing Square Holdings amounted to 22.2% in returns from Dec. 2012 to Dec. 2015 under Ackman’s management, 30% below the S&P 500.
In March 2017, Pershing took another huge hit on Valeant Pharmaceuticals, which story I covered in another post https://defeatmarket.blogspot.com/2017/09/citron-research-wolf-of-wall-street.html
He endorsed Michael Bloomberg as a prospective candidate for President of the United States in the 2016 presidential election. After Donald Trump became president, Ackman told The New York Times that he was "bullish" on Trump's presidency.
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