Muddy Waters is short

[TwoCitiesCapital]

4 hours ago, dartmonkey said:

Ackman has never done anything like this, to my knowledge, talking about a long or short investment while simultaneously trading it in the opposite direction. Ackman comes up for a lot of criticism nowadays, for his heresy of not supporting the right candidate, but this accusation seems gratuitous.

 

Ackman went on CNBC in 2020 crying about how COVID was going to be "hell on earth" as his traders were actively unloading his credit hedges for billions in profits and loading up on hotel stocks. 

 

Fear-mongering may, or may not have, played into pricing of overall assets and credit spreads. It's impossible to say what his impact was other than the narrative he was selling was entirely different from the actions he was taking. 

 

Illegal? Probably not. Tasteless? Absolutely. 

 

And while not quite a pump/dump scheme, the whole Allergan/Valeant acquisition scandal shows he's not uncomfortable toeing the line of right/wrong.

 

Edited December 3 by TwoCitiesCapital

[dartmonkey]

1 hour ago, TwoCitiesCapital said:

 

Ackman went on CNBC in 2020 crying about how COVID was going to be "hell on earth" as his traders were actively unloading his credit hedges for billions in profits and loading up on hotel stocks. 

 

Fear-mongering may, or may not have, played into pricing of overall assets and credit spreads. It's impossible to say what his impact was other than the narrative he was selling was entirely different from the actions he was taking. 

 

Illegal? Probably not. Tasteless? Absolutely. 

 

And while not quite a pump/dump scheme, the whole Allergan/Valeant acquisition scandal shows he's not uncomfortable toeing the line of right/wrong.

 

 

To think that Ackman going on TV and worrying about COVID might have been influencing the price of credit hedges and hotel stocks seems highly implausible - Ackman was far from alone in thinking that, and he does seem to have been worried enough to buy a shitload of protection, so he got that right. To make the case that he was worrying in public at exactly the same time while his traders were trading the opposite way presumes to know more about the timing of his comments and the trades than we really know. But the narrative here : https://www.cnbc.com/2020/03/27/bill-ackman-says-his-cnbc-interview-was-bullish-denies-harming-market.html suggests to me that his concern was genuine, and on the same day that he made his comments on CNBC, he also said that he was buying stocks, because he was confident that the situation could be brought under control. So I think he was advocating for draconian measures to combat COVID, not to push down the share values of the stocks he wanted to invest in, but in order to limit the damage to the shares he had already bought.

 

Now I think Ackman has been proved totally wrong about COVID and its impact on the US: in retrospect, the whole shutdown was almost completely pointless. And you are right that the Allergan investment and attempts to shop it to Valeant were close to the line and resulted in SEC fines, although this seems to me to be pretty much activist investing 101: buy a stake and try to get it sold for a better price.