American hedge fund chief Bill Ackman made $ 2.6 billion by betting against markets a few days after fueling fears by saying “hell is coming” and begging President Donald Trump to shut the country down amid the coronavirus pandemic
American hedge fund chief Bill Ackman made $ 2.6 billion by betting against the markets a few days after fueling fears by saying that hell is coming and begging President Donald Trump to shut the country down amid the coronavirus pandemic.
Pershing Square Capital Management hedge fund manager said his company had earned $ 2.6 billion from a one-time bet that the coronavirus epidemic would cause a global market crash.
His company was seized by bond market turmoil during the coronavirus crisis in acquiring “credit protection on various global investment levels and high yield credit indices.”
The bet, designed to protect Pershing Square Capital Management from the stock market crash triggered by the pandemic, saw his company make its initial investment of $ 27 million almost 100 times.
The firm completed the transaction on March 23rd.
The huge comeback barely came a week after Ackman gave an emotional television interview claiming that “hell is coming” for American affairs.
Ackman told CNBC on March 18 that “hell is coming”.
He urged American affairs to stop share repurchases and preserve cash.
‘America will end as we know it. I’m sorry to say it, unless we take this option, ‘he warned.
‘We have an invisible, silent, deadly enemy. How do we kill him? Everyone goes home. ”
Desolate scenes – Wall Street in New York is almost empty amid the outbreak of Covid-19
He warned the hotel and service industry to be compromised by market turmoil and that Boeing “will not survive” without a government bailout.
In a Twitter crossing the same day, Ackman urged President Trump to shut down the country for a month, saying it was the “only answer” to save the nation from economic catastrophe.
‘Mr. President, the only answer is to close the country for the next 30 days and close the borders. Tell all Americans that you’re taking a long spring break at home with the family. Keep only essential services open. The government pays wages until we reopen, “tweeted Ackman.
‘None by default, nobody precludes. A 30 day rental, interest and taxes for everyone. The arrest is inevitable as it is already happening, but not in a controlled way that is extending the economic pain and amplifying the spread of the virus. ”
‘With the exponential composition, every day we postpone the arrest costs thousands, and soon hundreds of thousands, and then millions of lives, and destroys the economy.
‘Please send everyone home now. With your guide, we can finish now. The rest of the world will follow your lead. A global spring break will save us all. ‘
Later that day he clarified his remarks, saying: ‘I am confident that the president will do the right thing by temporarily closing the country and closing borders. If that happens, we can win the war against the virus, markets and the economy will go up. ”
Despite Ackman’s serious warnings, Pershing Square began to change tact once the U.S. government moved to a $ 2 billion incentive package for its economy, which has now been approved by the Senate.
The hedge fund launched a market crash on March 23, just five days after Ackman gave his stark warning.
Pershing Square then began using the money earned to purchase shares in various companies, including the Hilton hotel chain and the Starbucks coffee franchise.
He also bought shares in Berkshire Hathaway.
“Last week we became increasingly positive on the equity and credit markets and began the process of dissolving our hedges and redistributing our capital in companies we love at bargain prices built to resist this crisis and which we believe can thrive for a long time. deadline, “Ackman wrote in an online post Wednesday.
Pershing Square’s profit from trade could build up as one of the most profitable ever, if confirmed.
The hedge fund reportedly lost money in the first two months of 2020.
The Senate approved the incomparable $ 2.2 trillion economic rescue package on Wednesday, targeting aid to businesses, workers and health systems engulfed by the coronavirus pandemic.
The unanimous vote came despite the concerns of both sides about whether to go too far or not far enough and limited the days of difficult negotiations while Washington faced a national challenge like it never faced.
The 880 page size is the largest economically significant invoice in the history of the United States.
In addition to helping “Main Street” businesses, hard-hit airlines, US manufacturing companies and other businesses, Americans could receive $ 1,200 each.
Married couples could receive $ 2,400 from the bill and American parents could get $ 500 for each child under the age of 17.