Bill Ackman SPAC Debacle Is Example of Stock Market Bubble, Investor

• High-profile hedge fund manager Bill Ackman has enjoyed huge successes and suffered huge failures.
• He appeared headed for another success with a SPAC, but turned it into a disaster when he tried to pull a switcheroo on investors.
• Ackman may be brilliant, but he has suffered defeats when hubris takes over and makes him tone deaf.
• Erik Gordon is a professor at the University of Michigan’s Ross School of Business. 
• This is an opinion column. The thoughts expressed are those of the author.

Bill Ackman should say nothing, not one word, until he finds a fix for his stunning tone deafness.

The famous, swashbuckling investor can afford to find a good one. Ackman’s hedge fund, Pershing Square Capital, made over $2.5 billion in less than two weeks by betting on the market chaos of March 2020. That may have been his fastest billion, but it certainly was not his first.

Regardless of Ackman’s recent or historic success, the debacle over his latest venture — the bungled rollout of a special purpose acquisition company, or

SPAC
— shows that even the most successful investors can become victims of their own hype and deaf to legitimate feedback.

Ackman’s big wins — and huge misses 

Ackman is not a stranger to large, public battles over his investments. 

On the success side of his ledger are positions like Canadian Pacific. A decade ago, he tripled a billion dollar bet in roughly two years on the railroad. More recently he made sweet money on last year’s Starbucks bet.

But Ackman has also made some sour investments, often coming with public embarrassment. He lost big money on JC Penney and Target. He accused nutrition company Herbalife of being a Ponzi scheme and predicted its stock would fall to $0. His short of Herbalife got Ackman into a war of words with another hedge fund legend, Carl Icahn. Icahn made a billion dollars on Herbalife. Ackman probably lost a billion dollars.