Seeking Alpha

Ackman's Pershing Square down $1.2B since March

  • William Ackman's very public fights over Herbalife and J.C. Penney have proven to be rather costly: the value of assets under management at the activist investor's Pershing Square firm were reportedly down by $1.2B at the end of September from $12.4B on March 1.
  • Pershing's main fund is up 0.5% on the year, well below the S&P 500's 20% return.
  • Pershing Square recently suffered a loss of over $600M on the sale of its JCP stake, while it's also down on a bet against Herbalife. Ackman this week restructured his $1B short position on the company in order to limit the losses.
This was corrected on 10/07/2013 at 10:39 AM.
Comments (3)
  • Roger C. Wren
    , contributor
    Comments (248) | Send Message
     
    Knock the man all you like while he is in a dry spell. I followed him into GGP when it was bankrupt and got out with an eight bagger. Ackman himself through his fund got in earlier and cheaper and ended up with a 30 bagger. I wonder how many of those knocking him lately have ever had a 30 bagger.
    4 Oct 2013, 06:45 AM Reply Like
  • Michael Blair
    , contributor
    Comments (4962) | Send Message
     
    It looks good on him. I suspect it will get worse before it gets better. There are better ways to make money than cowing the boards of directors of established companies into making significant changes based on the "I know better" view of a hedge fund manager who lacks real operating experience and thinks it is just about the short term stock price. Regardless of the merits of the investment I thought his treatment of Fred Green and the CP board of directors was deplorable conduct and the spate of derailments and safety incidents that followed under Hunter Harrison display what I believe to be wanton lack of concern for who gets hurt.
    4 Oct 2013, 06:45 AM Reply Like
  • Ted Bear
    , contributor
    Comments (635) | Send Message
     
    Playing the (fundamental) short game is a whole new ball of wax for Ackman.

     

    First, your story has to be right.

     

    Second, your borrows have to be protected.

     

    Third, you have to endure a short squeeze which might take your investment down by 200-300 present.

     

    And the, finally, if your story is correct, you get paid in spades.

     

    Do some research on Canon Films as one of the great fundamental shorts which went through exactly this scenario....before it went to zero.

     

    If Ackman's work is correct, he will eventually get paid in HLF. So far, we are deep into stage three.
    4 Oct 2013, 07:10 AM Reply Like
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