- Home›
- investment›
- news»
- Bill Ackman's latest short is a 'smart lottery ticket' bet against the Hong Kong dollar – here are 7 of his biggest trades
Bill Ackman's latest short is a 'smart lottery ticket' bet against the Hong Kong dollar – here are 7 of his biggest trades
George GloverDec 4, 2022, 16:41 IST
1. Wendy's, 2004
Shortly after setting up Pershing in 2004, Ackman took a large stake in the fast-food chain Wendy's.
The activist investor immediately started pressuring Wendy's to spin off its Tim Hortons coffeehouse business, which it did successfully in 2006 to raise around $670 million for its shareholders.
Ackman exited his Wendy's position in 2009 for a substantial profit – although the business has seen its share price tumble in the years since the Tim Hortons spinoff.
2. General Growth Properties, 2009
One of Ackman's all-time greatest trades saw him rescue mall operator General Growth from collapse – and eventually sell his stake for $1.6 billion.
The hedge fund manager spent $60 million to acquire General Growth shares in 2009 before persuading the struggling company to file for bankruptcy.
Ackman then played a key role in the company's reorganization, selling back shares as its stock price soared until he finally exited his position in 2014.
3. Herbalife, 2012
Ackman called the dietary supplement firm Herbalife a pyramid scheme in 2012 – marking the start of a five-year effort to generate returns by shorting the stock.
Ackman opened up a short position worth around $1 billion in Herbalife, betting it would eventually see its share price crash towards $0.
But the short became one of Ackman's biggest-ever losses, as Herbalife's share price continued to rise until he eventually had to liquidate his position in 2017.
4. Valeant Pharmaceuticals, 2014
Pershing Square acquired 8.5% of Valeant for $180 a share in 2014, in what would become known as one of Ackman's most disastrous trades.
The pharmaceuticals firm saw its share price plummet more than 90% over the next three years after facing multiple accusations of fraud and coming under investigation from the Securities and Exchange Commission.
Pershing Square eventually closed its entire position in Valeant in March 2017, losing over $3 billion on the trade.
5. COVID-19 response, 2020
Ackman's fame shot to new heights in March 2020, when he made just $2.6 billion betting that the coronavirus pandemic would trigger a full economic shutdown in the US.
Pershing Square spent $27 million buying credit protection on investment-grade and high-yield bond indexes – and then liquidated its position once the Federal Reserve started buying up corporate bonds to protect the economy.
That helped the hedge fund to post a 7.9% gain in March 2020 – a month when the pandemic triggered a 17% crash in the S&P 500.
6. Netflix, 2022
Ackman announced a big bet on Netflix in late January – but exited that position just three months later for a $400 million loss.
That sale came on a day the streaming company saw its share price plummet 35% in a single day after announcing massive subscriber losses.
"While Netflix's business is fundamentally simple to understand, in light of recent events, we have lost confidence in our ability to predict the company's future prospects with a sufficient degree of certainty," Pershing Square said in an April letter to investors.
7. Rising interest rates, 2022
But Ackman bounced back from that loss with a big bet on Federal Reserve interest-rate hikes.
He said in October that Pershing Square had made $2.7 billion by spending around $400 million on interest rate-related hedges as the US central bank stepped up its tightening campaign.
"We've had some very significant profits from hedges, a decent percentage of which we've realized," Ackman told Interactive Investor. "We've probably made $2.7 billion of profits."