Showdowns and legacy
Showdowns and legacy
For all his early triumphs, some of Ackman’s most defining moments came from very public setbacks and showdowns. By the mid-2010s, he found himself embroiled in high-profile battles that would test his conviction and shake his reputation. Two episodes in particular — one a crusade against a company he viewed as fraudulent, and another a disastrous bet on a touted Wall Street darling — stand out as cautionary tales in his career.
Herbalife vs. Icahn
In 2012, Ackman publicly declared war on Herbalife, a nutritional supplements company. He announced a massive $1 billion short position (meaning he was betting the stock would collapse), emphatically accusing Herbalife of being a “pyramid scheme” with essentially zero real value. This bold move set the stage for a finance industry spectacle: fellow billionaire Carl Icahn took the opposite side, went long on Herbalife, and the two titans began a feud for the ages. Their rivalry exploded into the public view in January 2013 during a now-legendary live CNBC segment, where Ackman and Icahn traded barbs in an unhinged shouting match that captivated Wall Street observers.
Initially, it looked like Ackman might score a quick victory. In the weeks after he revealed his short, Herbalife’s stock plummeted nearly 60%. But the company proved more resilient than Ackman anticipated. Over the ensuing years, Herbalife’s business held steady and its stock gradually clawed back losses. Ackman dug in his heels, maintaining his short position despite mounting costs — after all, shorting a stock for years requires paying steep borrowing fees, especially as the stock refuses to die.
By 2018, reality set in. Herbalife never collapsed as Ackman predicted; in fact, it was doing fine. Facing the prospect of infinite patience with no payoff, Ackman finally capitulated and closed out his short bet. After roughly five years of fighting, the “pyramid scheme” crusade ended not with a bang but a whimper — Pershing Square reportedly lost upwards of $500 million in the process, not counting the time and energy expended. It was a humbling chapter, and one that taught Ackman a very expensive lesson about the dangers of sticking too firmly to a thesis. The saga was chronicled endlessly in financial media (and even a documentary film), cementing its place in Wall Street lore. (Interestingly, Ackman and Icahn later buried the hatchet, with Icahn gradually exiting his Herbalife stake by 2021.)
Valeant fiasco
Around the same time Ackman was battling Herbalife, he was also knee-deep in another high-stakes investment — this time on the long side. In 2014, Pershing Square took a massive stake (eventually 8.5%) in Valeant Pharmaceuticals, a once high-flying pharma company. Ackman was initially optimistic about Valeant’s aggressive roll-up strategy of acquiring other drugmakers to boost growth. But that optimism turned into one of the most notorious misfires of his career. Valeant soon came under fire for alleged fraud and unsustainable business practices, and its stock went into a tailspin.
As scandal engulfed Valeant — from investigations into its accounting, to public outrage over drug price hikes — Ackman’s investment unraveled. The stock that Pershing Square bought around $190 per share imploded to near $10 at its lows. By 2017, Ackman finally threw in the towel and exited his entire position, swallowing an estimated loss of over $3 billion. The debacle devastated Pershing Square’s performance and spooked its investors, leading many to question whether Ackman had lost his touch. The Valeant debacle was a staggering blow, cementing itself as a prime example of how even a superstar investor can get it disastrously wrong.
Nor was that the last time Ackman would misjudge a situation. In early 2022, he wagered roughly $1.1 billion on streaming giant Netflix, buying the stock after a price dip. Just a few months later, when Netflix reported surprise subscriber losses and its shares plunged further, Ackman abruptly reversed course and sold the entire stake at a reported $400+ million loss. Ackman admitted that Netflix’s new challenges made its future too uncertain for him to stay invested, so he cut his losses. Even after decades in the game, Ackman was reminded that not every bet — long or short — goes his way. Around the same time, an ambitious attempt to acquire a major company via a $4 billion special-purpose acquisition company (SPAC) fell apart, forcing Ackman to return the capital to investors.
Pandemic windfall
If the mid-2010s tested Ackman’s resolve, the early 2020s showed he still had some tricks up his sleeve. In spring 2020, as the COVID-19 pandemic spread chaos and fear through the markets, Ackman pulled off one of the greatest trades in hedge fund history. Sensing an impending market crash, he spent $27 million on credit default swaps and other hedges as protection (essentially insurance contracts that would pay off if markets crashed). When markets cratered in March 2020, those hedges skyrocketed in value. Within weeks, Ackman turned that $27 million into a windfall of roughly $2.6 billion.
Ever the showman, Ackman went on TV amid the turmoil, tearfully warning that “hell is coming” if America didn’t act decisively to stop the virus. Critics noted that his dire predictions also conveniently boosted the value of his hedges. Ackman maintained that he was simply speaking his mind and preparing for what he believed was inevitable. Regardless, after cashing out the huge gain, he swiftly pivoted and used the profits to buy shares in companies at bargain prices, betting on a recovery. (For example, he plowed cash into beaten-down Hilton Hotels stock, which later rebounded strongly.) It was a quintessential Ackman move — dramatic, controversial, and ultimately extremely profitable.
Philanthropy
Beyond the boardroom and trading floor, Ackman has also made a mark through philanthropy and charitable initiatives. Having achieved great wealth, he hasn’t shied away from pledging sizable portions of it to causes he cares about:
Giving Pledge: Ackman joined the Giving Pledge, committing to donate at least half of his fortune to charity over his lifetime.
Pershing Square Foundation: In 2006, Ackman and his wife Karen founded this foundation, which supports innovation in healthcare, education, economic development, human rights, and the arts.
Community support: Ackman has donated and raised funds for institutions like the Center for Jewish History, reflecting his dedication to cultural and historical causes.
Today, Bill Ackman stands as one of Wall Street’s most famous – and infamous – figures. He now presides over a personal fortune estimated at around $10 billion, and his Pershing Square fund oversees roughly $15–20 billion in assets. He’s a billionaire investor who’s been both celebrated and vilified, often at the same time. Along with peers like Carl Icahn and Daniel Loeb, he’s considered one of the most prominent activist investors of his era. His career is a testament to the power of bold conviction, for better or worse. Love him or hate him, one thing is certain: Ackman’s high-stakes adventures have left an indelible mark on the financial world, and he isn’t done yet.
Bill Ackman exhibits a bold and innovative approach to investing, using activist strategies to challenge corporate norms and unlock hidden value while navigating market complexities with precise timing.
Bold bets
Bold bets
With Pershing Square, Ackman cemented his identity as an activist investor. In his own words, he looks for large companies with promising potential but fixable flaws – then buys in and agitates for changes that will unlock value. Ackman also tends to run a concentrated portfolio (only around 10 holdings at a time), focusing on his highest-conviction ideas. This high-engagement, high-conviction strategy can seem like corporate meddling to some and visionary to others. Either way, it defines Ackman’s rock-and-roll approach to investing: shake things up and make things happen.
The results of Ackman’s bold bets have been anything but boring. Sometimes his moves pay off spectacularly – other times they backfire just as dramatically. He’s scored deals that netted over a billion dollars in profit, and he’s also endured investments that cost him billions in losses. In short, he swings for the fences with a go-big-or-go-home attitude, and not every swing connects.
Wins and losses
A snapshot of Ackman’s track record in the 2000s shows just how extreme his investing saga can get:
2002 – Shorting MBIA: Spots trouble at bond insurer MBIA and boldly bets against it. After five years of persistence, the 2008 financial crisis vindicates him as MBIA’s fortunes collapse.
2005 – Wendy’s campaign: Takes a large stake in Wendy’s and successfully pressures the fast-food chain to spin off its Tim Hortons division, driving up shareholder value and earning a hefty profit on exit.
2007 – Target showdown: Builds a big position in Target and pushes for board seats, but fellow shareholders reject his plan. Ackman’s dedicated Target fund suffers significant losses, forcing him to concede defeat in 2009.
2008 – Borders & Barnes & Noble: Invests in struggling bookseller Borders and even offers a $960 million financing deal to merge it with rival Barnes & Noble. The plan never materializes, and Borders goes bankrupt in 2011, costing Ackman hundreds of millions.
2009 – General Growth revival: Bets $60 million on near-bankrupt mall operator General Growth Properties during the financial crisis. After a successful reorganization, Pershing Square’s stake balloons in value, reportedly earning the fund about $1.6 billion in profit by 2010.
2012 – Canadian Pacific victory: Acquires a 14% stake in Canadian Pacific Railway and wages a fierce proxy battle. He ousts the CEO and installs new management, after which the railroad’s performance improves and its stock soars.
By the early 2010s, Ackman had firmly established himself as a force to be reckoned with in the investment world. He was wealthy, outspoken, and not afraid to go toe-to-toe with corporate CEOs or even fellow billionaire investors. But his most infamous showdowns – and some of his biggest lessons – were still on the horizon.
From Chappaqua to Wall Street
From Chappaqua to Wall Street
Making a name on Wall Street by calling for change is never easy. Anyone who loudly challenges the financial status quo risks being branded a “black sheep” among the investing elite. Yet sometimes that contrarian voice in the herd turns out to be right—and those bold stands can reap huge rewards over time.
Under that prism stands William “Bill” Ackman, born May 11, 1966, in Chappaqua, New York. Ackman has built his career on being outspoken, often positioning himself as the voice of dissent pushing for change. He’s a hedge fund manager and philanthropist by trade, best known as the founder and CEO of Pershing Square Capital Management, a high-profile fund he launched in 2004.
Raised in a comfortable Jewish family, Ackman had a relatively privileged start. His father, Lawrence David Ackman, ran a successful mortgage financing real estate firm (Ackman-Ziff Real Estate Group), and his mother was a senior executive at a New York company. This upbringing meant Ackman had access to top-tier education and opportunities from an early age.
Ackman made the most of those opportunities. He earned a degree in history magna cum laude from Harvard College in 1988, then stayed on at Harvard to complete an MBA. Even as a student, he displayed the drive to question conventional wisdom—an intellectual restlessness that would later define his investing style.
Founding Gotham Partners
Not long after finishing business school, Ackman wasted no time jumping into the investment world. In 1992, at just 26 years old, he co-founded the investment firm Gotham Partners with his Harvard classmate David Berkowitz. The young firm didn’t shy away from audacious moves—in the mid-1990s, Gotham teamed up with insurer Leucadia National to bid for New York’s famed Rockefeller Center. That bid ultimately fell through, but the bold attempt put Gotham Partners on the map and attracted a surge of new investors to the fund.
By 1998, Gotham Partners was managing roughly $500 million in assets, a testament to Ackman’s knack for persuading others to trust his vision. However, one misstep would derail Gotham’s success. Ackman made a big bet on a struggling golf course operator—renaming it Gotham Golf—and tried to merge it with a cash-rich real estate trust to save the floundering business. In 2002, a judge blocked the merger, siding with minority shareholders of the real estate company who felt the deal shortchanged them. That legal defeat left Gotham Golf drowning in debt and sent Gotham Partners itself into a tailspin as panicked investors demanded their money back.
At the same time, regulators began investigating whether Gotham had unfairly used research reports to influence the prices of stocks it owned—a probe that ultimately went nowhere, but added to the negative spotlight. Facing this storm of setbacks, Ackman made the painful decision to liquidate Gotham Partners in 2002. It was a humbling chapter, but also an education: he later reflected that the ordeal taught him to avoid overly complex, illiquid investments in the future.
Still, Ackman was far from finished making his mark. Almost immediately after closing Gotham, he set his sights on a new target. He began an in-depth crusade analyzing MBIA, a major bond insurer, suspecting its AAA credit rating masked serious risk (a stance that would prove prophetic years later). Then, in 2004, backed by his earlier connections at Leucadia, Ackman launched Pershing Square Capital Management. With Pershing Square, he now had a powerful vehicle to carry out his brand of high-conviction, activist investing on a larger stage. His showdown with MBIA was an early indication of the activist crusades he was willing to undertake, setting the tone for battles to come.
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BILL ACKMAN: WALL STREET'S BLACK SHEEP
Bill Ackman might not be a household name for everyone, but within the high-stakes world of finance he stands out as a fearless, often controversial figure. Often dubbed the “black sheep” of Wall Street for his contrarian bets, Ackman has never shied away from a fight. Over the past few decades, the Pershing Square Capital founder has racked up huge wins and equally dramatic losses — all while championing an activist approach that shakes up companies and sometimes entire industries. From a live TV shouting match with fellow billionaire Carl Icahn over Herbalife to turning a daring pandemic market wager into $2.6 billion, Ackman’s saga is a Wall Street roller coaster that never fails to intrigue.