If you want to get a conversation going, you might as well do it with a letter titled simply “Mistakes.” That’s what activist investor Bill Ackman did when he admitted that his controversial, high-profile bets for JC Penney (JCP) and against Herbalife Ltd. (HLF) had both misfired, spectacularly.
In the letter, the once high-flying Ackman referred to his failed attempt to turnaround JC Penney by installing a handpicked CEO with no department store experience and making radical, hands-on changes to store policy a “failure.” Ackman resigned from JC Penney's board on Aug. 13, ending his troubled tenure at the retailer in a public, embarassing fashion.
Just prior to writing the letter concerning JC Penney, Ackman defended his other major 2013 blunder, the $300 million (and counting) loss his hedge fund Pershing Square Capital has incurred shorting Herbalife, which he has called a “pyramid scheme” for its multi-tiered marketing system. Ackman claimed he’s making progress on getting federal regulators to take a closer look at the company. But like with JC Penney, it seems now like he's just trying to save face.
The fact is, the investor, once the crown prince of activist investing, has tanked spectacularly, and--especially in the eyes of the media--might be down for good. It hasn't always been this way. When he famousy predicted (and successfulyl shorted) the 2007 financial crash, he was lauded as a visionary and more. But now, with the latetst string of bad bets, it's like Ackman wasn't ever on top to begin with.
Ackman’s own admissions, with letters entitled "Mistakes" stand in stark contrast to his confident, no-hold-barred past as an activist who saw what others didn't. Now, his seesaw contrition and bravado belies uncertainty, and mirrors the investment community’s own waning perception of the divisive investor.
When Ackman is up, he’s up. And when he’s down, people can’t wait to dogpile. Below is an assembled brief timeline of public perception of Ackman via press snippets:
The Golden Boy Who Predicted the Financial Collapse
"(Ackman) may be aggressive, he may be over the top, he may not be able to speak in short sentences… but he's doing the hard work, and thinking the hard thoughts, that (Wall Street regulators) refused to do for far too long.”
A Distinguished Visionary
Ackman… has had the seminal financial career of the past two decades, which is to say that he’s had the seminal American career of the era…
Ackman up close might be the most winning salesman on Wall Street.
Like Elvis, With a Smarter Portfolio
In person, Ackman cuts a striking figure, standing at 6' 3" tall with a shock of grey hair. But it is the stature of his fund's performance which is what most draws investors to him.
The Backlash Begins, Albeit With Sarcasm
Headline: “Bill Ackman Can’t Help That He’s Awesome and People Want to Get Close to Him”
Okay, Ackman Might Be the Same… But He’s Smooth!
(Billionaire investor Carl Icahn) still has the whiff of a fast-buck artist... Ackman's approach is often the same, (but) he… wrap(s) his tactics in a smooth, well-learned politesse.
Not to Mention, the Guy is a Matchmaker
Helping his single friends and acquaintances find a life partner is, however, close to the multi-millionaire’s heart and he’s doing his part to help. And every so often, Ackman and his wife whirl through their Rolodexes and invite their unattached friends to come on over to their place and spend a few hours meeting other singles.
We Still Believe, Bill Ackman
The Guardian, Jan 25 2013
At Ackman's famous investing presentations, in which he invites other money managers to learn why he has turned against a certain company, the investors look at him, wide-eyed and admiring, as if he were a financial messiah.
Maybe it’s Not All Roses
(Ackman) seems to look at other members of society, even legends such as Carl Icahn, as some kind of sub-species. The disgusted, annoyed look on his face when confronted by the masses beneath him is like one you’d expect to see [from someone] confronted by a homeless person who hadn’t showered in weeks.
Lest We Forget Though, He’s Still a Hero for Taking on Herbalife…
Ackman has been heroic in taking on this litigious, well-financed industry (Herbalife.) Not since Jim Chanos went after Enron has a hedge fund manager been willing to question whether a company was actually a criminal enterprise. That takes guts.
While Ackman Ignores His Failures, We Ignore Him…
As Bill Ackman took the stage on Wednesday at the Ira Sohn Conference in New York, the audience erupted in applause expecting to hear one of the day’s best ideas. Instead, they spent their time checking emails…
Because Really, The Herbalife Bet is Failing. Hard.
The Street, Aug 10 2013
Sometimes the smartest guy in the room outsmarts himself.
And Now the Schadenfreude
Bloomberg MSG, Aug 10, 2013
Never interfere with an enemy when he is in the process of destroying himself.