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Pershing Square Acquires Stake In United Technologies

01 March 2018

William Ackman'sPershing Square Capital Management LP has taken a stake in United Technologies Corp. He kicked off the campaign with a $1 billion bet against the company in 2012 and spent millions to investigate the business. Instead, Herbalife shares have since soared 27 percent.

The activist investor had placed the massive bet against the nutritional supplement maker he accused of running a pyramid scheme and called a massive fraud. But Ackman's bearish bet on Herbalife was a signature event given how much time, effort and money he devoted to making his case - all in the hopes that the federal authorities would take action against Herbalife. He expected the shares to fall to zero, enabling him to profit on his short sale of the stock.

Ackman closed his short position on Herbalife previous year, but held on to put options which would have earned his firm a profit if Herbalife's stock declined. But its enforcement action against Herbalife in July 2016 was not the death knell that Ackman had been counting on.

In a January report, Pershing Square showed only 2 percent of short exposure, down from 4 percent it showed when it converted its short position to a put in October. Icahn has defended Herbalife's multilevel-marketing model and publicly assailed Ackman - on stages, television, in documentaries and online - since an initial CNBC phone-in fight between the two billionaires.

"I've really about had it with this guy", Icahn said.

At another point Ackman remarked: "This is not an honest guy, and this is not a guy who keeps his word. Unfortunately, I can't say the same for you".

Ackman and Icahn, a longtime friend of President Donald Trump, buried the hatchet in 2014.

There was a live television shouting match between Mr. Ackman and Carl Icahn, the activist who became Herbalife's biggest investor in 2013; Netflix aired a full-length documentary that supported Mr. Ackman; and there were star turns by soccer star Cristiano Ronaldo and former Secretary of State Madeleine Albright in support of Herbalife. Under the agreement, the company had to rein in its business practices - a move that Ackman said would cripple it. According to TheStreet, Icahn has made nearly $1 billion profit from his investment.

Pershing Square Acquires Stake In United Technologies