Ackman blames retail traders for fund’s weak Wall Street debut

By Nell Mackenzie

LONDON, April 30 (Reuters) – Billionaire Bill Ackman on Thursday blamed retail investors for the roughly 18% drop in his newly listed closed-end fund’s stock price a day earlier, adding that he expects shares to rebound.

“Retail investors don’t know how to invest in IPOs,” he said on a call with foreign journalists one day after listing the new stock-picking fund, as well as his management company, on the New York Stock Exchange.

Ackman marketed his U.S. stock market listing as a chance for retail investors to access investments normally limited to the ultrawealthy – even though his fund has underperformed the broad stock market in the past several years.

Over the last eight years, Ackman said his closed-end fund has returned an average of 25% a year, beating other funds’ performance.

The investor said he thought retail investors overcommitted to his IPO, got the shares they said they wanted but then didn’t have the cash to pay for them and were therefore forced to sell.

The new fund, Pershing Square USA, was priced at $50 but shares sank to $40.90 on Wednesday. They traded up more than 6% on Thursday at $43.54, still below the IPO price.

“We had a whole bunch of people dump that stock yesterday for technical reasons,” he said.

He also said institutional investors made up more than 80% of the capital, raising some questions about how retail investors could be blamed for Wednesday’s sharp drop.

Investors who bought five shares of Pershing Square USA at the initial public offering were gifted one share of his management company Pershing Square Inc. That stock rose 20% to $29.18 after opening trading at $24 on Wednesday.

The $5 billion raised in the IPO swelled Ackman’s overall assets by 25%.

Ackman on Thursday flew to Canada and held his conference call with foreign journalists on the tarmac in Montreal in order to comply with U.S. securities regulations. No U.S. journalists were permitted to listen.

On the call, he said he and his employees committed roughly $500 million in cash to Pershing Square USA.

On Thursday he said fellow fund manager Marc Lasry and tech mogul Mark Zuckerberg’s family office ICONIQ Capital invested in the stock.

The new fund’s investments will closely mirror what Ackman already holds in another fund, Pershing Square Holdings, a closed-end fund listed in London.

The main holdings include Google parent Alphabet and Zuckerberg’s Meta Platforms.

Pershing Square Holdings rose an annualized 7% from 2015 through 2025, underperforming the S&P 500’s 11% increase over that time. Including dividends, the S&P 500’s lead would be more. Strong returns from bets on AI have not been enough to offset losing bets Ackman made a decade ago related to companies such as Valeant Pharmaceuticals and Herbalife.

Looking ahead, Ackman said he is likely to launch another fund within a year, possibly even before the end of the year.

(Reporting by Nell Mackenzie in London)