Bill Ackman Says He’s Done with Activist Short Selling

Billionaire Bill Ackman said Tuesday that he will no longer take part in vocal activist short selling campaigns.

Bill Ackman, an activist short seller said Pershing Square has permanently retired from this line of work.

Bill Ackman’s Pershing Square is an American hedge fund run in New York with more than 13.1 billion assets under management.

His story as a short seller is well known for losing a significant amount of money shorting Herbalife.

A very interesting take in my opinion and I’m going to share with you all the details below.

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Bill Ackman, Herbalife short

Now former short seller activist, Bill Ackman is known for shorting Herbalife.

He began shorting Herbalife in 2012 but closed his position in 2017, cutting his losses.

Ackman had expected the stock to tank further over time, enabling him to make a windfall through a short sale.

But the strategy backfired.

Bill Ackman’s short bet on Herbalife cost him $1 billion in losses.

Now the short seller says Pershing Square is taking a different approach.

Entering the 19th year of Pershing Square, Ackman said he’s ready to take his firm to the next era to focus on long-term, “quieter” bets.

So, it looks like the short seller is trying to steer from having eyes on them.

He said they have had the opportunity to get to know many boards and management teams, and they’ve built a reputation as a constructive, long-term, and helpful owner.

Ackman added his team has been cordial, constructive, and productive and that they intend to keep it that way as it makes their job easier and more fun, to improve their quality of life.

Bill Ackman on GameStop and retail investors

Ackman said in an interview last year that retail is the biggest investor in the world.

He said investors have the power to move stock prices.

And he’s not wrong.

The only thing stopping retail investors from truly moving the markets is the lack of regulation on market makers and hedge funds.

You can watch the full interview below.

Heavily shorted stocks such as AMC and GameStop have cost short sellers billions of dollars both last year and this new year.

AMC short sellers saw $750 million in losses over a period of two weeks.

Short sellers betting against GameStop saw almost $500 million in losses in one day alone last week.

AMC is up more than 39% this week while GME stock is up more than 30%.

You can view their updated short interest data here.

Both these stocks continue to be heavily shorted despite their complete turnaround in fundamentals.

And it seems short sellers are taking this one personal with retail.

Retail investors weren’t wrong about AMC’s first two massive runups last year, and they won’t be wrong about the third runup this year either.

What is Bill Ackman’s Pershing Square investing in?

Ackman said about 30% of our equity portfolio is invested in music and video streaming — UMG and Netflix, while 26% in restaurants and restaurant franchising — Chipotle, Restaurant Brands and Domino’s.

He also owns sizable stakes in Lowe’s, Howard Hughes and Hilton.

“We expect that each of these companies will grow their revenues and profitability over the long term, regardless of recent events and the various other challenges that the world will face over the short, intermediate, and long-term,” Ackman said.

What do you think led to Ackman’s complete business remodel?

After all, Pershing Square was one of the hedge funds that benefited from Fannie Mae and Freddie Mac half a decade ago.

Short sellers made approximately $100 million according to S3.

In a time where short sellers are under extreme scrutiny, do you think it’s possible this billionaire is trying to stay away from the likes of the Justice Department?

Citadel, Muddy Waters Research, Citron, and others are all currently under investigation by the DOJ.

I’d love to hear what you think.

Leave a comment below.

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