Billionaire investor Bill ·Ackman announced this week that he was cancelling the initial public offering (IPO) of his new closed-end fund, Pershing United States Square USA (PSUS), which was supposed to begin trading on the New York Stock Exchange in a few days.
Synthesis | Wall Street News Associated Press Editor| Arti
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Ackerman is known for his brilliant record in the investment world and his precise operation during the epidemic, he accurately shorted U.S. stocks during the epidemic, and in 2023, he once again made a big effort to successfully short U.S. bonds, and closed his positions at the low point. But now he faces a different challenge: his social media presence has not translated into the expected return on investment.
In January, he confidently announced plans for an IPO of Pershing Square USA's closed-end fund, targeting $25 billion, which he hopes will attract thousands of investors through high social media exposure and a format similar to Warren Buffett's annual meeting.
The target financing amount of $25 billion has also become one of the "largest IPOs in the United States" in many years. The move would also more than double the $19 billion in assets under management of Ackerman's Pershing Square Capital Management.
Over time, however, this ambitious plan suffered setbacks.
To push for the IPO, Ackerman has met with more than 150 investors over the past few weeks and highlighted his fund's 16.5% annualized return since 2004. However, many investment advisers are skeptical, believing that the fund's performance will not meet expectations after the IPO.
Although Ackman's social media presence has earned him a large number of supporters in the conservative camp, it has not translated into actual investment returns. On the one hand, his social media presence is nowhere near enough compared to figures such as Trump and Musk, the analysis points out.
On the other hand, Birdthistle, a former United States Securities and Exchange Commission official, said: "When you're trying to sell financial returns to people, things get more complicated. I think Trump and Musk are more natural and straightforward, and what you see is what they really think, while Ackman is more deliberate and well-designed. ”
In the previous week, Ackerman's new fund began to scale back its offering twice in quick succession, from $25 billion to $4 billion and then to $2 billion. At least one cornerstone investor opted out of the deal after publishing the open letter.
Finally, this week, Ackerman announced that he had withdrawn his IPO application, a decision that surprised Wall Street.
Ackerman, who has 1.3 million followers, posted a text statement on the social media platform X in which he said his team had reassessed the fund's structure, noting that "we will report back to you once we are ready to launch the revised deal." ”
A few hours later, Ackerman posted again, "I decided to withdraw my IPO on Wednesday morning because I thought of a better deal structure." ”
After the news of the withdrawal of the IPO, Ackerman's social media performance also appeared unusually low-key. His first tweet was just a press release announcing the retraction of the IPO, and there was no ridicule or controversy that is common in the past.
Pershing Square USA's IPO turmoil has overshadowed Ackerman's lackluster investment returns this year. Pershing Square Holdings, his European-traded closed-end fund, is up just 6.4% this year through July 23, while the broader market is up 16.5% over the same period.
To make matters worse, shares of Universal Music Group NV, one of Pershing Square Holdings' major holdings, began to fall sharply at the end of last week, falling more than 20 percent, as the company's earnings fell short of expectations.