Key Takeaways
- Lost $4 billion on Valeant Pharmaceuticals — one of the biggest hedge fund losses ever
- Made $2.6 billion in 30 days with a genius COVID-19 hedge
- Publicly shorted Herbalife in the most epic Wall Street feud with Carl Icahn
- Built Pershing Square into one of the most famous activist funds
- Uses media and public pressure to force corporate change
The Harvard Kid Who Wanted to Shake the World
Bill Ackman wasn't born into Wall Street royalty. He was born in 1966 in Chappaqua, New York, to a real estate financing exec father. But what he lacked in pedigree, he made up for in raw, unfiltered ambition.
Harvard undergrad. Harvard MBA. While his classmates were chasing safe consulting jobs, Ackman was already dreaming of something bigger: He wanted to buy companies and make them better — whether they liked it or not.
In 1992, fresh out of Harvard Business School, Ackman and a classmate raised $3 million to start Gotham Partners. The pitch was simple but audacious: give us your money, and we'll invest in undervalued companies and shake things up.
"I like to take very concentrated positions. If you're going to do research, you might as well do a lot of research on a few things."
— Bill Ackman
Gotham Partners grew to $500 million. But the first chapter of Ackman's story wouldn't end in triumph. It would end in humiliation — and a lesson that would take years to fully understand.
The MBIA Short: Being Right Too Early
In 2002, Ackman spotted something rotten: MBIA, one of the biggest bond insurers in America. They were insuring complex financial instruments that Ackman believed were garbage.
He went public with his analysis. He shorted the stock. He screamed from the rooftops that MBIA was a ticking time bomb.
The response? Everyone thought he was crazy.
Deep Research
Ackman spent months analyzing MBIA's exposure to subprime mortgages
Regulatory Pressure
MBIA lobbied regulators, Ackman was investigated by Eliot Spitzer
Years of Pain
Gotham Partners closed in 2003 while Ackman waited to be proven right
Ackman was forced to close Gotham Partners in 2003. His investors were furious. His reputation was damaged. But he didn't give up on the MBIA trade.
Then came 2008. The financial crisis. MBIA collapsed. Everything Ackman had warned about came true. His MBIA puts made over $1.1 billion.
"Being early is the same as being wrong, but only temporarily."
— Bill Ackman
The lesson was brutal: You can be 100% right and still get destroyed if your timing is wrong. But if you survive long enough, vindication tastes sweet.
Pershing Square: The Activist Empire
After Gotham collapsed, most people would have retreated. Ackman doubled down.
In 2004, he launched Pershing Square Capital Management with $54 million. This time, he wasn't just going to invest. He was going to fight.
Pershing Square AUM Growth
From $54 million in 2004 to managing over $18 billion at peak — Ackman built one of the most influential activist funds in history.
Ackman's strategy was different from traditional hedge funds. He didn't just buy stocks and wait. He bought large stakes and then went to war with management.
Wendy's (2005)
Pushed to spin off Tim Hortons. The stock doubled.
Canadian Pacific (2012)
Fought to replace the CEO. Transformed the company. Made $2.6 billion.
Chipotle (2016)
Bought after E. coli crisis. Pushed for changes. Made billions on the recovery.
General Growth (2008)
Bought during bankruptcy. Became his best investment ever.
Herbalife: The $1 Billion War
In December 2012, Ackman made a presentation that shook Wall Street. For three hours, he laid out his case that Herbalife was a pyramid scheme.
He had a $1 billion short position. He was betting the company would go to zero.
What happened next was one of the most personal, public, and vicious feuds in market history.
"Herbalife is a pyramid scheme, and we believe it will ultimately collapse. We're short the stock and will take this to the end of the earth."
— Bill Ackman, December 2012
Then Carl Icahn entered the ring. The legendary corporate raider took the opposite side. He went on CNBC and called Ackman a "crybaby" and a "liar." On live television. For 30 minutes.
The CNBC Showdown
January 25, 2013: Ackman and Icahn screamed at each other on live TV. "I don't like you, I don't respect you!" Icahn shouted. Wall Street stopped to watch.
Icahn bought shares. Other investors piled in. Herbalife didn't collapse — it more than doubled.
After five years, Ackman finally closed his short position in 2018. He lost approximately $1 billion. It was a very public, very expensive failure.
But here's what most people don't know: while fighting Herbalife, Ackman was quietly making billions elsewhere. A true power player doesn't go all-in on one battle.
Valeant: The $4 Billion Disaster
If Herbalife was painful, Valeant Pharmaceuticals was catastrophic.
Ackman loaded up on Valeant stock in 2015, eventually owning a stake worth over $4 billion. He believed in the company's "platform" business model — acquiring drugs and raising prices.
Then everything fell apart.
Congressional Scrutiny
Drug pricing became a political lightning rod. Valeant was in the crosshairs.
Accounting Questions
Reports of hidden pharmacy relationships and questionable practices emerged.
Stock Collapse
Valeant stock fell from $260 to under $15. A 95% drop.
The Exit
Ackman sold in 2017 for a total loss approaching $4 billion.
Ackman didn't hide. He did what he always does — went on CNBC, admitted his mistake, and took responsibility publicly.
"I think at the peak we had too large a position in one stock. It was a huge mistake. The lesson is portfolio concentration can kill you."
— Bill Ackman on Valeant
Pershing Square suffered massive redemptions. His AUM dropped by more than half. Critics said Ackman was finished.
They were wrong.
The COVID Trade: 100x in 30 Days
March 2020. The world was waking up to COVID-19. Markets were jittery but hadn't fully collapsed. Ackman saw what was coming.
He spent $27 million on credit default swaps — essentially insurance that would pay off if corporate bonds collapsed.
Then, on March 18, 2020, Ackman went on CNBC. What happened next became legendary.
"Hell is coming. America will end as we know it. Close the borders. Do it now."
— Bill Ackman, CNBC, March 18, 2020
He was visibly emotional. Some said he was crying. Twitter exploded with accusations that he was talking his book — trying to panic the market while he held short positions.
But here's the twist: Ackman wasn't short the market. He was hedging.
When he closed his hedges for $2.6 billion profit (nearly 100x return), he immediately deployed that cash into buying stocks at the bottom. He loaded up on Hilton, Starbucks, and Lowe's at crisis prices.
By year-end 2020, Pershing Square was up 70%. It was one of the greatest comeback stories in hedge fund history.
The Genius Move
While everyone debated if Ackman was panicking, he was executing a masterplan: hedge the downside, then use the profits to buy the bottom. Pure asymmetric warfare.
The Ackman Playbook
Love him or hate him, Ackman has developed a distinctive approach that has generated billions:
Extreme Concentration
Hold 8-12 positions max. Know them better than anyone. This is a double-edged sword — it amplifies wins AND losses.
Active Ownership
Don't just buy stocks — buy enough to force change. Get board seats. Fire CEOs. Change strategy.
Use the Media
Public presentations, CNBC appearances, Twitter threads. Ackman understands that narrative moves markets.
Asymmetric Bets
Risk a little to make a lot. The COVID trade was $27M to make $2.6B — that's the ideal risk/reward.
Survive to Win
After MBIA, Herbalife, and Valeant, Ackman kept going. Persistence is underrated.
Admit Mistakes Publicly
When wrong, own it. Go on TV. Write the letter to investors. Credibility comes from honesty, not infallibility.
Beyond Money: The Twitter Philosopher
In recent years, Ackman has become something unusual: a billionaire with a massive Twitter following who shares opinions on everything from business to politics to education.
He's been outspoken about university leadership, DEI policies, and has even called for the resignation of university presidents. Whether you agree with him or not, he's impossible to ignore.
"I've made mistakes and learned from them. I've been too concentrated, held too long, and let my ego get in the way. But I keep coming back because I love the game."
— Bill Ackman
In 2024, Ackman announced plans for a massive IPO of a fund that would let retail investors access his strategy. It was aiming to be the largest IPO in history — until it was scaled back due to market conditions.
Even in setback, Ackman doesn't disappear. He recalibrates and comes back. That's the definition of an activist.
What Bill Ackman Teaches Us
Bill Ackman is not a passive investor. He's not quiet. He's not always right. But he is always in the arena.
He's lost billions in public. He's been mocked on live television. He's had investors abandon him. And yet, he's still here, still swinging, still building.
His career teaches us that in markets — and in life — you don't need to be right all the time. You need to:
- Size your winners big enough to overcome your losers
- Survive your mistakes long enough to learn from them
- Have the courage to act on your convictions
- Stay in the game when everyone else would quit
You don't become a billionaire by playing it safe. You don't change companies by being quiet. Bill Ackman is proof that audacity — backed by research and managed risk — can move mountains. Even when those mountains fight back.