Billionaire hedge fund manager Bill Ackman denied that a TV interview he gave last week was intended to push the markets down in favor of his hedging trade.
“Our hedge had already paid off prior to my going on CNBC,” Ackman wrote in a letter to his Pershing Square Capital Management investors over the weekend. “The idea that my appearance pushed the market down an additional 4% that day is absurd.”
Ackman told CNBC on March 18 that he believed the best approach to killing off the coronavirus was to close the borders and shut down the entire country for 30 days, except for essential services.
The $2.6 billion Pershing Square had earned from hedging its stock portfolio through credit protection did not increase in value during or after the CNBC interview, Ackman wrote in the letter to investors.
“My bullish posture and my statements on CNBC and Twitter were strongly supportive of the markets. I made those statements at the time we were buying stocks and reducing our short in the credit markets,” Ackman explained. “We had turned bullish and we were in the process of investing about $2.5 billion in equities.”
Ackman disclosed that he aggressively bought up shares of Hilton Worldwide Holdings Inc. (HLT), Starbucks Corp. (SBUX), and Restaurant Brands International (QSR), the owner of fast-food chain Burger King.
Wall Street analysts assign a Moderate Buy consensus rating for both Starbucks and Restaurant Brands. The average price target of $82.30 offers Starbucks investors a potential gain of 24% in the coming 12 months.
While the $65.19 average price target for Restaurant Brands stock suggests a 61% upside in the next 12 months.
The consensus of analysts is that investors should Hold Hilton stock. With an average price target of $95.57, Hilton shares could add 38% in the next 12 months.