Hard Pass
By 
Bill Ackman tried to leverage his new celebrity as an MAGA Twitter crank who helped get some university presidents fired into a new investment fund, with hilarious results:
Bill Ackman pressed pause on the initial public offering of a new fund aimed at everyday investors after a lack of investor demand forced him to dramatically shrink his fundraising target.
The U-turn came after the billionaire investor spent weeks touting plans to launch “a company that will be of note in the public markets,” would hold annual meetings similar to Berkshire Hathaway’s and eventually be added to an index like the S&P 500.
Ackman originally aimed to raise around $25 billion in the offering, hoping to capitalize on his social-media celebrity, before lowering the target to around $2 billion this week.
Ackman said in a press release that he is rethinking the structure of the closed-end fund, Pershing Square USA, to address concerns from potential investors.
Many closed-end funds, which sell a fixed number of shares to the public, trade at a discount to the net value of their holdings. Ackman said that investors’ principal question was whether they would be better off waiting to invest in Pershing Square USA after it goes public under the ticker PSUS.
“This question has inspired us to reevaluate PSUS’s structure to make the IPO investment decision a straightforward one. We will report back once we are ready to launch a revised transaction.”
The move caps—for now, at least—one of the most bizarre public offering processes in years.
Ackman kicked off the fund’s roadshow earlier this month with grand ambitions. The $25 billion target was multiples of what the largest-ever fund of its type raised in its IPO. He pitched it as a way to democratize access to a successful hedge-fund strategy for ordinary investors.
Ahead of the fund IPO, Ackman sold a roughly $1 billion stake in his hedge-fund firm, Pershing Square, with a vision that included increasing the assets that it managed by many billions of dollars. That sale was meant to lay the groundwork for an eventual public listing of his hedge-fund firm, which the stake sale valued at about $10.5 billion.
But drumming up investor interest in the Pershing Square USA IPO was slow-going, he said in a letter to Pershing Square shareholders last week. The fund was expected to mirror his main stock-picking fund, which invests in companies like Chipotle Mexican Grill and occasionally adds macroeconomic hedges.
Not only is Warren Buffet one of a tiny handful of people with an actual track record of beating the S&P 500 with stock picks, he doesn’t try to attract attention by writing 10,000 word tweets about how much he’s grown to love fascism. For once, the market has decided to be rational.