Short No More
Bill Ackman, being one of the most famous investors ever, is also a very outspoken one. His passion for his job has made him appear on the news many times, and his investment style fits this too. He is most known for his involvement with the company Herbalife Nutrition, where he used his activist short selling strategy in a multi-year spat with the business and Carl Icahn. This strategy vaulted Ackman’s fund, Pershing Square, into one of the largest activist funds despite the losses accrued with Herbalife.
Ackman announced on Wednesday that Pershing Square will retire this strategy, and instead adopt their current strategy of being well in touch with companies they’ve invested in. Pershing has done well in the past few years, delivering 70 percent returns in 2020 and 27 percent returns in 2021, and Ackman said he is ready to accept the “quieter” version of the hedge fund. The trend of short-selling is starting to level off a bit, with firms looking for buying opportunities over companies headed for the grave. The rapid increase in short squeezes over the past 2 years has sent firms into a bloodbath, with Melvin Capital being a fitting example. The amount of activist short-selling campaigns has seen a steady decline since 2019, and a continuation could see a less volatile market to deal with. Some notable businesses Ackman has his money in are Netflix, Canadian Pacific Railway, and Chipotle, all of which are performing well.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
