Final hours! Save up to 55% OFF InvestingProCLAIM SALE

Ackman says TV interview did not lead to profit on trades

Published 03/27/2020, 10:18 AM
Updated 03/27/2020, 10:20 AM
© Reuters. FILE PHOTO:  William 'Bill' Ackman, CEO and Portfolio Manager of Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York City
DJI
-
SQ
-

BOSTON (Reuters) - Billionaire investor William Ackman said a CNBC television interview he gave last week was not designed to profit from any trades, dismissing some media speculation he had purposely pushed markets lower to make money off his hedges.

"Our hedge had already paid off prior to my going on CNBC," Ackman, wrote to his Pershing Square (NYSE:SQ) Capital Management investors late Thursday. "The idea that my appearance pushed the market down an additional 4% that day is absurd."

Ackman told CNBC on March 18 that he thought the best approach to killing off the coronavirus was to close the borders and shut down the entire country, barring essential services, for 30 days. "Hell is coming, shut it down now," he told CNBC.

The S&P 500 was off 6.5% when he began speaking and fell more and the Dow Industrial Average, already off 1,000 points when he began, hit a circuit breaker as he spoke and reopened down 2,000 points.

In Thursday's letter, Ackman said "some press reports had raised questions about his appearance" and questioned whether he "intended to drive down the market so that we could profit on hedges we had previously entered into."

Last week investors said the interview unnerved already jittery shareholders. "Please get Ackman off CNBC before people start jumping off bridges," prominent investor Mike Novogratz tweeted during the interview.

Ackman said in the letter that he had sold more than half the hedge before the show and sold the balance over the next three trading days. "The hedge did not increase in value during or after I went on CNBC," the letter said.

Pershing Square earned roughly $2.6 billion by hedging its stock portfolio through credit protection on investment grade and high yield credit indices. Much of the money has been reinvested in stocks the firm already owns.

© Reuters. FILE PHOTO:  William 'Bill' Ackman, CEO and Portfolio Manager of Pershing Square Capital Management, speaks during the Sohn Investment Conference in New York City

For two years, Ackman had stayed largely out of the public eye to resuscitate his loss-battered portfolio which rebounded with a record 58% gain in 2019. He returned last Wednesday with an early morning tweet and the CNBC interview and has followed up with more interviews to explain his thinking.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.