Betting on Ackman
Bill Ackman has gained new fame in recent months for his outspoken presence on social media. But he's also made money for his investors and himself — and now others are hoping he'll continue to do so.
His Pershing Square Capital Management 10 percent stake sold for just $1 billion to a series of outside investors, giving the hedge fund a lofty valuation. The question is whether Ackman's new fans on social media will follow him as he expands his empire, which includes a newly listed fund and eventually an IPO.
Pershing Square is now valued at $10 billion. Buyers in the firm include Arch Capital Group, BTG Pactual and Iconiq Investment Management; Bloomberg reports that Ackman's peers include Marc Lasry and Doug Hirsch was also purchased.
That has boosted Ackman's wealth by $8 billion, putting him at 333rd place among the world's richest people, according to Bloomberg.
Investors are betting that Pershing Square will continue to make money. Ackman became famous as an activist investor who profited by turning companies around, a strategy that made a lot of money — but also lost a lot. He now focuses more on a few concentrated bets, including Chipotle Mexican Grill and Universal Music Group. That approach has been successful, with a 26 percent return last year.
Ackman's firm also has a big advantage over rivals: Its publicly listed fund, which trades in Amsterdam and London, has permanent capital, where buy-side investors can only cash out when someone buys their share. (Other rivals let investors take out their money on a daily or quarterly basis.) This allows for more predictable assets and management fee revenue.
Pershing Square shares have also surged as Ackman has become more vocal on social media. especially after He criticized Harvard's efforts to tackle anti-Semitism following the Hamas-led attacks on Israel on October 7. He has also publicly criticized diversity initiatives and President Biden. (The Financial Times reported last week that Ackman would soon Support Donald Trump (With an announcement on Elon Musk's X platform.)
Wall Street has speculated that Ackman's more vocal presence on social media is aimed at attracting retail investors. If so, the strategy appears to be working: Amsterdam-traded shares in the fund are up 44 percent over the past seven months.
Will his followers be attracted to his future growth initiatives? Pershing Square is hoping to open a closed-end fund in the US this summer — which Bloomberg reports could reach $25 billion. Like the European fund, it will be open to retail investors. (It also plans to raise $5 billion for another fund focused on high-risk bets, according to the report, and has received SEC approval for a publicly traded vehicle. Investing in private companies,
If these plans come to fruition, Pershing Square will manage at least $45 billion, vaulting it into the top spot. Top 10 Largest US Hedge Funds By assets.
Over the next year, Pershing Square intends to accomplish its long-term goals: DealBook seems to understand that this is a way to publicize itself. That, too, could benefit Ackman's new fans — and perhaps even more if his favorite presidential candidate wins, too.
See what's happening here
Indian markets lost gains on possibility of lower-than-expected victory for Narendra Modi. The country's Nifty 50 index fell nearly 6 percent on Tuesday as early vote counting indicated the prime minister would win the election. Winning a third termBut that his party would lose a significant number of seats in Parliament. Investors had been buoyed by exit polls that had predicted a landslide victory for Modi, giving him a good chance of continuing. Their economic development strategies,
New York state is reportedly planning to ban social media for children. Lawmakers have tentatively agreed on a law that would restrict tech platforms Providing algorithmically managed feeds to minors According to the Wall Street Journal, this is the latest effort to ban social media without parental consent, as there are concerns about its effect on children; similar legislation is also being considered in California.
Airbus is said to be in talks to sell planes to China amid Boeing's troubles. The European aircraft manufacturer is negotiating the deal. Sale of over 100 A330 jets Last month, Chinese President Xi Jinping met his French counterpart Emmanuel Macron, Bloomberg reported. In contrast, Beijing has halted purchases from Boeing as regulators review cockpit voice recorders, which have already been approved in Europe and the US.
Regulators have reportedly targeted a major company over its alcohol pricing practices. The FTC is preparing a lawsuit against Southern Glazer's Wine & Spirits, a major wine and liquor distributor. Politico reportsThe case would be the latest effort by the Biden administration to go after companies it has accused of improperly raising prices.
GameStop keeps going up
GameStop is at it again. Shares were volatile in premarket trading Tuesday, bouncing between gains and losses. That’s after Monday’s rally added $1.7 billion to the struggling retailer’s market value, boosting the paper wealth of “meme stock” investor Keith Gill, known as Roaring Kitty.
The big question is whether Gill’s removal from his trading platform will derail the latest rally, or whether regulators will step in to investigate this unbridled volatility.
Morgan Stanley reportedly considering ousting Gill from E*TradeThe brokerage company owns the deal. After the mega rally in GameStop last month, the company looked at Gill's trading history. It found that his E*Trade account had bought a large block of GameStop call options before a May 12 post from a social media account linked to Gill that helped drive a surge in shares, According to the Wall Street Journal,
E*Trade is concerned that such trading could amount to stock manipulation, The Journal reports. Regulators, including the SEC, are also reviewing recent trading volumes around GameStop, The Journal notes.
But E*Trade faces a tough decision: If he removes Gill, will it lead to a massive outcry from customers or will they flee?
Gill isn't worried about that. A post on his Reddit account on Monday revealed a screenshot He revealed he owned $140 million worth of GameStop shares and call options to buy more. His followers on Reddit cheered him on. “This is a deep value play,” one wrote, predicting that those who bet against the stock would suffer huge losses.
Shorts have been hurt by GameStop, but they appear unaffected by it. were short sellers of GameStop Big drop last monthBut that hasn’t stopped people like Andrew Left of Citron Research, who was squeezed in the 2021 GameStop rally, Opening a new short position,
This is a big condition. GameStop has surged more than 70 percent in the past month, a period in which other day-trader favorites, including bitcoin and the tech stocks at the center of the artificial intelligence boom, have stagnated.
Retail investors have jumped back into the company's shares in hopes that Gill's return after a long period of silence will rekindle some of the big gains they saw in 2021.
But the attention it has received recently is a far cry from those heydays. At that time, GameStop and other meme stocks like AMC Entertainment and BlackBerry saw massive jumps in valuation in just a few days.This time around, retail investors appear to be more cautious, Ivan Kosovic, managing director at market data company Breakout Point, told DealBook.
His company has noticed a big surge in buzz about GameStop, but nothing different from what was seen three years ago, when investors pumped big punches into beaten-down stocks with stimulus checks and pandemic savings under the “YOLO” — you only live once — rally slogan.“We haven’t seen any concrete evidence that we’re reliving the events of 2021,” Kosovic said.
“We are seeing an increase in the number of blue-collar and entry-level white-collar people. The purchase price of a car has suddenly come within reach.”
— Alex Lawrence, a Salt Lake City dealer who specializes in used electric cars, says of the drop in prices Making vehicles more affordable to a broader group of consumers. Increased competition, lower costs of raw materials, more efficient manufacturing and federal tax credits are all credited with bringing down prices.
A top Gates Foundation official resigns
One of the longest-serving leaders is exiting the Gates Foundation, just weeks after Melinda French Gates signaled she would leave the charity she started with her ex-husband Bill Gates. Rob Rosen, who has overseen the Giving Pledge for a decade, will step down at the end of the month, The Times’s Theodore Shleifer reveals for DealBook.
Rosen was one of the most influential people to do large-scale philanthropic work. A former aide to Bill and Hillary Clinton, his role as director of the Philanthropic Partnership meant he was a key middleman for Gates with big donors. This included trying to persuade other billionaires to sign the Giving Pledge, a commitment to give away more than half their wealth during their lifetime or in their wills, an idea Gates created with Warren Buffett in 2010.
The Giving Pledge announced its latest donors last week. These included OpenAI CEO Sam Altman, and the list now includes about 250 wealthy individuals or couples who pledge to give money to philanthropic causes. (The pledge has also been criticized for failing to hold donors accountable to that commitment.)
Rosen organizes annual gathering of signatoriesWhere they discuss each other's philanthropic work. Rosen broke the news of his imminent exit at the most recent meeting last week. This gathering was the first in which the children of these billionaires were also allowed to attend.
“I have decided that now is the right time in my career and life to move on from the Foundation,” Rosen wrote in a note to some partners last week, seen by the Times. Rosen, who has worked at the foundation for 17 years, said an interim director would be appointed.
Rosen's departure has added to the turmoil at the foundation. The timing is coincidental, but the incident comes just days after French Gates said he would Holiday This is perhaps the most significant change to the foundation — which has set aside $12.5 billion to spend on its philanthropic work.
Last week, French Gates revealed. Some of the groups she will start supportingincluding organizations that advance women's rights, and offered donations 12 individuals will get $20 million each to give to the charities of your choice.
Speed Read
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elections 2024
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Donald Trump and the Republican National Committee announced $141 million in funds raised last monthThe incident has escalated following the former president's criminal conviction last week. (NYT)
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On Tuesday, President Biden is expected to sign executive order The border with Mexico has been temporarily sealed as the issue of illegal immigration heats up. (NYT)
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