Bill Ackman Threatened by Controversies and Investor Threats in 2021

Bill Ackman's 2021 was marked by intense scrutiny and controversy. His Pershing Square Tontine Holdings, a special purpose acquisition company (SPAC), was at the center of many of these challenges.

Ackman's SPAC faced criticism for its high fees, which accounted for nearly 40% of the company's assets. This was a significant departure from the typical 2-3% fee structure found in traditional SPACs.

Investors began to question Ackman's leadership and the company's value, leading to a decline in the stock's price. By the end of 2021, the stock had lost nearly 90% of its value.

Ackman received an ultimatum from a group of investors who threatened to withhold their support for the company's planned merger unless he stepped down as CEO.

Suggestion: Scion S Capital Meaning Michael Burry

Bill Ackman has a reputation for being ruthless and relentless in his business dealings, having gone to war against companies, executives, and other high-profile investors over the past three decades.

He has infuriated many of them, including Howard Schultz, the former Starbucks CEO, who said he was "disgusted" by Ackman's tactics.

Ackman has also been dubbed "a major loser" by billionaire investor Carl Icahn, who described him as either "the most sanctimonious guy I ever met" or "the most arrogant."

Ackman is known for firing off public letters, like the one he sent to JCPenney's board, urging them to replace their top executive.

This cutthroat approach has been used by Ackman against a long list of new targets, including his latest campaign against Harvard President Claudine Gay.

Bill Ackman's wife, Neru Oxman, was accused of plagiarism in her 2010 doctoral dissertation at MIT.

The accusations were made by Business Insider, which found that Oxman had stolen sentences and paragraphs from Wikipedia, fellow scholars, and technical documents.

Ackman complained that the articles were a low blow and that Business Insider gave him less than two hours to respond to the accusations.

Worth a look: Bill Ackman Business Insider

Oxman admitted to four missing quotation marks and one missed footnote in her 330-page dissertation.

Ackman threatened to sue Business Insider and its parent company, Axel Springer, for what he called "false claims and defamation".

Business Insider's CEO, Barbara Peng, stood by the accuracy of the articles, saying they were "newsworthy" and "well-documented".

Ackman claimed that the articles could have "literally killed" his wife due to the severe emotional harm she suffered.

Suggestion: Article Capital Budgeting

The Herbalife Dispute was a notable controversy in Bill Ackman's career, lasting six years and resulting in big losses for the hedge fund manager.

Ackman bet $1 billion against Herbalife in 2012, calling it a pyramid scheme in a three-hour presentation.

The company makes nutritional supplements, and Ackman's campaign to convince other investors and regulators of his assessment was quite elaborate.

Carl Icahn, a rival investor, disagreed with Ackman's assessment and even made the opposite bet, purchasing more than 13% of Herbalife shares after a heated argument on CNBC.

Ackman was dubbed a "crybaby" by Icahn, who also referenced his own tough childhood in Queens.

Ackman's wager ultimately didn't pay off, but he held onto the fight for years despite the odds being against him.

On a similar theme: Bill Ackman Herbalife Short

Bill Ackman is known for taking on companies he believes are hiding their financial problems. He's a determined investor who's not afraid to take a stand.

Ackman's six-year battle against Herbalife was a notable example of his persistence. He bet $1 billion against the company, calling it a pyramid scheme in a three-hour presentation.

Ackman's tactics often involve buying a significant amount of a company's stock, giving him a lot of sway. He did this with Canadian Pacific Railway, buying more than 14% of the company's stock in 2011.

Ackman's relentless pressure on Canadian Pacific Railway's executives ultimately led to the company's CEO resigning and several board members opting not to stand for re-election. This was a major coup for Ackman, who had been pushing for change.

Ackman's willingness to take on big companies is not without controversy, however. His rival investor Carl Icahn once called him a "major loser" and compared him to a "crybaby in the schoolyard".

See what others are reading: What Does over Spot Mean When Buying Gold

Bill Ackman's Pershing Square Capital Management faced a lawsuit from Valeant Pharmaceuticals, a company they had a significant stake in. The lawsuit accused Ackman of manipulating the stock price.

Ackman's hedge fund also faced criticism for its involvement in Valeant's accounting scandal. The controversy led to a significant decline in the fund's performance.

Ackman's aggressive investing style has led to conflicts with other investors, including a high-profile feud with Herbalife's CEO.

For more insights, see: Bill Ackman Valeant Pharmaceuticals

Negative media coverage is a powerful tool that some investors, like Bill Ackman, use to intimidate their targets. Bill Ackman threatened ADP with negative media coverage to "damage" the company.

ADP accused Ackman of trying to use his media influence to harm the company. This is a classic move by activist investors to gain leverage over their targets.

Ackman had been seeking three spots on ADP's board as part of a "transformation plan" that he thinks could double the company's stock price. He wants to avoid a proxy battle, which he thinks would give the wrong impression.

Take a look at this: Cumulus Media Inc Investor Relations

Ackman's request for an extension was likened to a "spoiled brat" asking a teacher for an extension on homework. This shows just how heated the situation has become.

Negative media coverage can be costly for companies, and it's clear that Ackman is willing to use it to get what he wants.

Investors are worried about inflation, with 71% of institutional investors expecting higher inflation in 2021.

The pandemic has caused a significant increase in government debt, which has raised concerns about the potential for inflation.

Many investors are concerned about the impact of climate change on their portfolios, with 75% of investors considering ESG factors when making investment decisions.

Cybersecurity threats are a major concern for investors, with 60% of institutional investors experiencing a cyber attack in the past year.

Regulatory changes have been a major concern for investors, with the SEC proposing new rules on ESG disclosures and the EU introducing the Sustainable Finance Disclosure Regulation.

Investors are also concerned about the potential for market volatility, with 55% of investors expecting a market correction in 2021.

The rise of passive investing has raised concerns about the potential for market inefficiencies and the impact on active managers.

A unique perspective: ESG Quant

Ackman uses the same methods to advocate for change, whether it's corporate governance or cultural changes.

He writes lengthy public letters, often shared with his million-plus followers on X, to make his case.

Ackman has written three memos to Harvard's governing board since October, detailing his concerns.

He even offered a deal to M.I.T.'s governing board, promising not to write them a letter if they promptly terminated their president.

Ackman has traveled to Cambridge, Mass., to meet with students and faculty at Harvard, demonstrating his commitment to his cause.

He has also done two live interviews with CNBC and spoken with a handful of reporters at major news organizations, showcasing his media savvy.

Ackman has declined several requests for an interview with NPR, suggesting that he's selective about how he shares his message.

His methods have been consistent, but the focus has shifted from corporate governance to broader cultural changes.

See what others are reading: Corporate Private Equity

Ackman has denounced Harvard and several other academic institutions for how they address antisemitism, and he has attacked public policy, including DEI.

He has called on Harvard to shutter its Office for Equity, Diversity, Inclusion, and Belonging, citing concerns about racism against white people.

Ackman has even threatened to sue Business Insider and its parent company, Axel Springer, for publishing articles he disagreed with.