Bill Ackman might be controversial, but he had the top performing hedge fund of 2014, as reported by Bloomberg. While he was ridiculed the previous year for his pressure to put Ron Johnson of AppleStores as CEO J.C. Penney, a move that proved disastrous for J.C. Penney and a poster child for critics of activist investing, he cleaned up this year in his fight to have Allergan taken over. Even though Ackman wanted Valeant to buy Allergan and the latter inked a deal with Actavis instead, Allergan’s stock roared during the long battle and ultimately the takeover, and to Ackman who had a large stake in the company, that is what counts.
Bill Ackman made $2 billion on his initial investment in the Botox maker, and he traded insults with Allergan CEO David Pyott during the hostile takeover bid. Pyott argued that Valeant would slash Allergan’s research and development budget and Valeant’s offer was severely undervalued. Ackman responded that Allergan just couldn’t accept the fact the company’s research budget had too much fat in it. However, the company’s strong performance in the last decade didn’t indicate there was anything broken at Allergan that needed fixing. For this, Bill Ackman has his critics, among them, Marty Lipton, an attorney known for defending businesses that are the targets of hostile takeovers and public raids. He is highly critical of the kind of activist investing practices by Bill Ackman, which seems purely predatory, and does not take the needs of the businesses targeted in mind. “It begins when an alpha wolf spots his prey and decides to move in for the kill, “said Lipton.
Will you offer us a hand? Every gift, regardless of size, fuels our future.
Your critical contribution enables us to maintain our independence from shareholders or wealthy owners, allowing us to keep up reporting without bias. It means we can continue to make Jewish Business News available to everyone.
You can support us for as little as $1 via PayPal at [email protected].
Thank you.
Bill Ackman seems to suspect Marty Lipton was talking about him, and has challenged Marty to a debate. He told Bloomberg, “Anywhere. For Any Length of Time.” To which Marty responded, “There is no way on earth I would debate Mr. Ackman. You know how I feel about him. He’s beneath me.”
Bill Ackman still gets plenty of criticism over his attempt to close down Herbalife as an alleged Ponzi scheme and to fatten his short position. “Herbalife was the first time there were people hoping we would fail, ” says Ackman. “That was the only time in my career I thought people were actively trying to harm us … we were exposing a fraud.”
However, Bill Ackman’s short position on Herbalife was not so successful, as the stock kept going higher. However, it has been down for four days in a row, so who knows?
