GekeVenn: PERSHING SQUARE
Pershing Square Capital Management, a hedge fund run by Bill Ackman, is imploding. According to CNBC, “The fund declined last month, bringing its 2018 performance through March to a loss of 8.6 percent and assets under management to $8.2 billion, less than half its 2015 peak.”
Ackman is a “financial activist” who attempts to punish companies he finds disreputable. The most blatant example of Ackman's activism is his shorting of Herbalife stock, a position for which he lost $500 million just to hold. He attempted to discredit Herbalife and lower its stock price (after he shorted it) by describing the company as a pyramid scheme. According to Wikipedia, “In 2014, Ackman spent $50 million on a public relations campaign against Herbalife, which was designed to negatively impact the company's stock price. Ackman pays about $100 million annually to maintain his short position.” He also pressured federal regulators to investigate Herbalife's business practices. Late last year he closed his short position as Herbalife's stock continued to rise.
The institutional investors in Pershing Square, including longtime partner Blackstone (venn below), are now jumping ship after the fund's continued losses in both its Herbalife and Chipotle positions.
Pershing Square's most notable revolving-door employee is Jenna Dabbs, who left a position with the US Attorney's Office to join the hedge fund to work on regulatory issues. The New York Times opined that “[t]he move reflects a growing trend of seasoned prosecutors’ bypassing the traditional career path of a job at a big law firm in favor of one at a hedge fund or private equity firm.”
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This may be inappropriate, but the feelings I get when I see a hedge fund imploding are intense and creep toward sex-levels of euphoria. I wonder if others ever experience this...if not, I'll call it danielism (these namey things worked out pretty well for Leopold von Sacher-Masoch)
The worst in society getting a comeuppance...it don't come around often enough. But, we'll see how things shake out in the end, the scum always seems to have a way of floating.
I second this.
lol I almost started the post with, "This one made me laugh." But then thought no, I'll keep it classy. 😉
It's amazing how we've gotten to this situation where the amount of corruption is so obvious and yet still very little is done about it. This is a win for the good guys.
As long as these scum don't receive multi million dollar bonuses at the end.
I love your posts. Super informative, well reasoned and faxt based.
I am very grateful for your work.