Bill Ackman
speaker
1,217 appearances
6 recordings
6 series
first heard Feb 2024
last heard 3 Jun
Bill Ackman’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 2 in all, peaking in Jun 2026 with 2.
Appearances
And it was a company where another activist was on the board of directors of the company and kind of governing and overseeing the day-to-day decisions. And we ended up making a passive investment in the company. And up until this point in time, we really didn't make passive investments. And the company made a series of decisions that were disastrous.
And then we stepped in to try to solve the problem. It was the first time I ever joined a board and the mess was much larger than I realized from the outside. And then I was kind of stuck. And it was very much a confidence-sensitive strategy because they built their business by acquiring pharmaceutical assets. And they often issued stock when they acquired targets.
And so once the market lost confidence in management, the stock price got crushed and it impaired their ability to continue to acquire low-cost drugs. And we lost $4 billion. $4 billion. Yeah. How's that for a big loss? It's up there.
And by the way, that loss catalyzed other, what I call mark-to-market losses. So very high profile, huge number, disastrous press. Then people said, okay, Bill's going to go out of business. So we're going to bet against everything he's doing. And we know his entire portfolio because we only own 10 things. And we were short a company called Herbalife, very famously.
We've only really shorted two companies. The first one, there's a book. The second one, there's a movie. We're no longer short companies. So people pushed up the price of Herbalife, which is when you're a short seller, that's catastrophic. I can explain that. And then they also shorted the other stocks that we owned.
And so that Valiant loss led to an overall more than 30% loss in the value of our portfolio. The Valiant loss was real and was crystallized. We ended up selling the position, taking that loss. Most of the other losses were what I would call mark-to-market losses. They were temporary.
But many people go out of business because, as I mentioned before, large move in a price, if investors are redeeming or you have leverage, it can put you out of business. And people assumed if we got put out of business, we'd have to sell everything or cover our short position. And that would make the losses even worse. So Wall Street is kind of ruthless.
So they can make money off of that whole thing.
What was it like going through that? It was pretty grim. It's actually much worse than that because I had a lot of stuff going on personally as well. And these things tend to be correlated. The valiant mistake came at a time where I was contemplating my marriage. And I was also, you know, the problem with the hedge fund business
is when you get to a certain scale, the CEO becomes like the chief marketing officer of the business. And I'm really an investor as opposed to a marketing guy. But when you have investors who give you a few hundred million dollars, they want to see you, you know, once a year, Bill, I'd love to see you for an hour.
But if you've got a couple hundred of those, you find yourself on a plane to the Middle East, to Asia, flying around the country. This is pre-Zoom. And that takes you away from the investment process. You have to delegate more. That was a contributor to the Valiant mistake. So now we lose a ton of money on Valiant. My ex-wife and I were talking about separating, getting divorced.
I put that on hold because I didn't want to make a decision in the middle of this crisis. And things just kept getting worse. We were also sued. When you lose a lot of money, we didn't get sued by our investors, but we got sued by a shareholder because when the stock price goes down, shareholders sue. We'd done nothing wrong other than make a big mistake. So you have litigation.
Your investors are taking their money out. Um, I'm in the middle of a divorce. Uh, the divorce starts to proceed. Uh, my, my ex-wife's lawyer's expectations of what my net worth was about three times what it actually was. And it was going lower in the middle of this.
And I remember the lawyers saying, look, Bill, you know, we've estimated your net worth at X, but don't worry, we only want a third. But X was 3X, so a third was 100%. And then we had litigation, and actually never before publicly disclosed, and I'll share it with you now. We had a public company that owned about a third of our portfolio that was called our version of Berkshire Hathaway.
I tried to learn from Mr. Buffett over time, and it was, so to speak, permanent capital. The problem with hedge funds is people can take their money out every quarter. What Buffett has is a company where people want to take their money out, they sell the stock, but the money stays. So we set up a similar structure in October of 2014. And then a year later, Valiant happens.
And then a year later, we're in the middle of the mess. And we're still in the mess. By mid-2017, we've got litigation underway. And another activist investor... A firm called Elliott Associates, which is run by a guy named Paul Singer, took a big position in our public company that was the bulk of our capital. And they shorted all the stocks that we owned.
And they went long the short, probably went long the short that we were short. And they were making a bet that we'd be forced to liquidate. And then they would make money on, you know, our public company was trading at a discount to what all the securities were worth. So they bought the public company. They shorted the securities.
And then they, you know, came to see us and to try to, you know, be activists and force us to liquidate. And that sort of. Wow. So I thought this was going to be. Wow. I envisioned an end where the divorce takes all of my resources. The permanent capital vehicle ends up getting liquidated. And another activist in my industry puts me out of business. And I had met Neri Oxman right around this time.
And I had fallen completely in love with her. And I was envisioning a world where I was bankrupt. A judge found me guilty of, you know, whatever. You know, he sent me off to jail. Not that judge because he was a civil judge, but another judge sues the SEC, Department of Justice. And I find myself in this incredible mess. And I decided I didn't want things to end that way.
So I did something I'd never done before. I talked all before about you don't borrow money. I borrowed money. And I borrowed $300 million from JP Morgan in the middle of this mess. And I give JP Morgan enormous credit in seeing through it. And also, you know, I had been a good client over a long period of time. And it's like, you know, it's a handshake bank. And they bet that I would succeed.
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