Bill Ackman hitches ride on meme-stock bandwagon
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Lauren Silva Laughlin
NEW YORK, June 4 (Reuters Breakingviews) -If there’s no such thing as bad publicity, Bill Ackman is in a sweet spot. The billionaire hedge fund manager has parlayed his newfound social media clout into a rich valuation for the Pershing Square Capital Management firm he started. The situation gives off a meme-stock vibe.
Pershing Square sold a 10% stake in its newly created parent company for almost $1.1 billion. The deal values the firm at a whopping 56% of its approximately $19 billion under management. Alternative investment peer Blackstone BX.N trades at 14 cents for every dollar it oversees. Man Group EMG.L, a London-based hedge fund firm, fetches just two cents by the same measure.
It’s hard to make much sense of the Pershing Square valuation. Ackman’s plan to list a closed-end fund might bring in another $25 billion, according to Bloomberg. In terms of size, which often matters when outside investors get involved, the firm is tiny. Point72 Asset Management, Steven Cohen’s successor investment shop to SAC Capital, is almost twice as large; Paul Singer’s Elliott Investment Management invests more than three times as much.
One thing notably bigger, however, is Ackman’s profile. At the start of the pandemic, he cited a nightmare that led him to prepare for the worst and took to what was then called Twitter to urge lockdowns. In 2023, he booked a big gain by shorting U.S. Treasury bonds, a thesis he publicly outlined at length. He also has used X, where he now has 1.2 million followers, to trumpet views on Ukraine, Palestine and college campus protests.
The attention might have helped with this week’s fundraising, which includes Brazilian investment bank BTG Pactual and Israeli insurer Menora Mitzvachim. It also evokes the reemergence of Keith Gill, the investor known as “Roaring Kitty,” whose musings on social media service Reddit RDDT.N have helped push GameStop GME.N shares far beyond their reasonable value using any sort of conventional financial analysis. In a world where fewer investors make decisions for themselves, it’s the loudest and most influential voices that can create and capitalize on momentum.
Follow @thereallsl on X
CONTEXT NEWS
Bill Ackman's Pershing Square Capital Management said on June 3 that it had raised $1.05 billion by selling a 10% stake in the hedge fund firm.
Investment firm Iconiq, specialty insurer Arch Capital, investment bank BTG Pactual, Israeli insurer Menora Mivtachim, investment manager Consulta and an international group of family offices were part of the fundraising, which imputes a $10.5 billion valuation on Pershing Square.
Editing by Jeffrey Goldfarb and Sharon Lam
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