What is the Bill Ackman Train Wreck?
The Bill Ackman Train Wreck, or “BATW” for short, refers to a series of losses sustained by billionaire hedge fund manager William Ackman in 2018. The losses began when he invested heavily in Herbalife Nutrition Ltd., a multi-level marketing company accused of operating as an illegal pyramid scheme. After several failed attempts to drive down the stock price and prove his thesis that the company was worthless, Ackman suffered heavy financial losses on paper due to his large stake in the company. This marked beginning of what would later be dubbed “the train wreck”.
Ackman’s next move was even more disastrous; investing millions into Valeant Pharmaceuticals International Inc., another controversial stock with numerous lawsuits against it at the time. When news broke that they were being investigated by US government agencies over their pricing practices, Valeant’s share prices plummeted and wiped out much of Ackmans investment leading him to dub it himself as a ‘train wreck’. Despite this setback however, Ackamn has since recovered from these loses following successful investments elsewhere and continues manage Pershing Square Capital Management LP successfully today.
