Tuesday, June 20, 2017

Watch out Wall Street, Bill Ackman is determined to bounce back

The biggest investment failure of my career happened in the last 18 months or so. I blame part of that on not managing my time effectively.

I need to make money. Now I’m very focused.

Tuesday, December 20, 2016

Reducing Herbalife shares for tax purposes

Pershing Square sold $51.7 million worth of the troubled Canadian pharmaceutical company’s stock recently, according to regulatory filings. The sale reduced Pershing’s Valeant stake to 7.8 percent from 9 percent. The purpose of the sale was to “generate a tax loss in 2016” for investors, according to the filing. Investors can use losses to offset other gains in their investment portfolios.

"HLF stock has traded down more than 33% since the announcement of the company’s settlement with the FTC on July 15th, 2016, a 15% year-to-date decline, as investors have come to increasingly ignore the company’s fraudulent characterization of the FTC settlement. At its December 2, 2016, price of $47.99 per share, HLF currently trades at approximately the price at which we shorted the shares in 2012."

"Fundamentally, pyramid schemes are confidence games. The CEO exit, deteriorating earnings, the declining stock price, and the John Oliver segment should materially impact Herbalife distributor confidence. When distributors reduce their purchases and/or leave the company, the financial results of the company should decline on an accelerated basis. Furthermore, we believe the injunctive relief demanded by the FTC is likely to significantly impact Herbalife’s financial performance beginning in the second quarter of 2017. Coupled with decelerating growth in many international markets, especially in China, we expect earnings to decline in 2017. We remain short Herbalife because we believe its intrinsic value is zero."

Thursday, November 3, 2016

Pershing Square relocating to Hell's Kitchen

Pershing Square Capital Management, the hedge fund headed by activist investor Bill Ackman, is relocating its headquarters to 787 11th Avenue in Hell’s Kitchen.

According to the Georgetown Company, the firm signed a 15-year lease for 67,000 s/f in the building. The space will be occupied by Pershing Square and the Pershing Square Foundation, the family foundation headed by Ackman and his wife Karen. The firm is expected to move in by late 2017.

“Hell’s Kitchen is a great live, work, play community with wonderful restaurants, services, transportation options and entertainment,” said Adam Flatto, the CEO of The Georgetown Company. “This is a neighborhood that will continue to grow and we’re pleased to welcome Pershing Square to the building.”

The property, which once housed a car dealership, has been redesigned to Ackman’s specifications. The upper floors have been renovated to include a two-story penthouse with a private terrace and a tennis court. According to a previous report from Crain’s, the amenities were part of Ackman’s wish list for the new office. The space was designed by architect Rafael Viñoly.

The Georgetown Company partnered with Ackman and Main Street Advisors to purchase the building in 2015. The deal was valued at $255.5 million. 

Tuesday, October 4, 2016

Sold entire stake in Canadian Pacific Railway

Bill Ackman’s Pershing Square Capital Management LP is unloading its entire stake in Canadian Pacific Railway Ltd., almost five years after sparking a turnaround at the company and becoming its biggest shareholder.

“Canadian Pacific has completed an incredible transformation since our initial investment in 2011,” Ackman said in a statement 

Pershing Square Capital Management has made no new large public investments for roughly a year. After dumping most of his position in animal health company Zoetis ZTS +0.67% this spring, Pershing Square is now exiting Canadian Pacific after a five year investment during which Ackman oversaw one of the great corporate turnarounds in recent memory. Ackman first invested in Canadian Pacific in the fall of 2011 with a plan to unseat the company’s management and bring in new leadership that could make the Calgary-based railroad more efficient. The play was a watershed for Ackman and hedge fund activists broadly. 

Canadian Pacific has been one of the Bill Ackman's biggest-ever winners, generating $2.6 billion in total gains, or an almost fourfold gain, according to public filings and a source familiar with the situation. 

Tuesday, September 6, 2016

New stake in Chipotle of almost 10 percent

Pershing Square Holdings Ltd., the hedge fund run by activist investor Bill Ackman, acquired a 9.9 percent stake in Chipotle Mexican Grill Inc. and will seek talks with the beleaguered restaurant chain.

Pershing said it believes that Chipotle shares are undervalued and plans to discuss ways to improve the company’s operations, cost structure, management and strategy, according to a filing Tuesday. A stake of nearly 10 percent would make Pershing Square the second-largest investor in Chipotle, according to data compiled by Bloomberg.

The announcement sent the shares up as much as 8.7 percent to $450 in late trading. The stock had been down 14 percent this year through Tuesday’s close, hurt by the fallout from an E. coli outbreak last year. Based on the latest closing price, Pershing Square’s stake of 2.9 million shares would be valued at about $1.2 billion.