On Tuesday Bill Ackman was supposed to end the life of the company Herbalife. He had a presentation that he was claiming would be the “death blow” to the company, but by the end of the day Herbalife stock had raised by over twenty-five percent. While he still made his presentation, his clients at Pershing Square Capital Management were not investors.
The investors at Pershing Square were quick to back up Ackman’s record. Several of them stated that he has a great track record and that they still view him as a great predictor of the market.
“We are long-term investors—his track record is amazing,” said Bryan Schneider, a Pershing Square investor at EnTrust Capital, which manages $11.6 billion in hedge fund assets for more than 400 institutional investors.
While Ackman has a great reputation the investors clearly decided that his advice was not useful in this case. Several of the investors implied that the recovery was a reaction to the selling in advance of his presentation. Once investors realized that they did not find his findings to be significant they then decided to buy back Herbalife stock.
While investors did not state that they were a hundred percent sure of Herbalife, they did say that they were finding themselves to be more confident in Herbalife.
The Pershing Square group is doing quite well lately. The group is now up by over twenty-five percent through the month of June and they probably will be up even more percentage points in June. This is partially due to their larger holdings of Allergen. The average has been just above four percent for all hedge fund strategies through the beginning of the year.
Many investors are now stating that the company is the best performing hedge fund right now.
Investors have mixed feelings about the Herbalife presentation. Many investors have noted that Ackman’s supposed losers eventually turn into winners after they recovery from his criticism.
Pershing Square group spent a significant amount of money investigating Herbalife, so many investors are worried about that amount of spending.
At the end of the day the majority of investors are still confident in Herbalife. They also stated that they think the media turns this into a circus for entertainment value instead of overall information value. While the controversy has been exciting investors are not too concerned.