Ackman Calls Pershing Square USA Stock Performance "Absurd" as Fund Trades at Deep Discount

Pershing Square's Chief Investment Officer Ryan Israel said the firm's stake in Hertz was relatively small and was sold after the rental-car company announced an equity offering that Pershing Square described as "bungled" and unlike anything the firm had previously seen, Andrew Bary and Janet H. Cho reported for Barron's Daily.

Pershing Square founder Bill Ackman is seeking to narrow the discount between Pershing Square USA's market price and its underlying net asset value. [Photo: Pershing Square]

Pershing Square USA, which raised approximately $5 billion in its initial public offering, had seen its net asset value increase 0.6% through Aug. 11 from its $50-a-share IPO price, compared with roughly a 9% gain for the S&P 500 over the same period.

Ackman described the fund's stock-price performance as "frankly absurd." 

Pershing Square USA's shares were trading at a substantial discount to their net asset value.

Ackman said the firm planned an "active marketing program" to narrow the discount, arguing that the fund represented an attractive opportunity at its prevailing valuation. 

The fund's weak share-price performance contrasts with the underlying portfolio's modest increase in net asset value.

Ackman has also recently added six new investments — Netflix, Visa, Mastercard, Intercontinental Exchange, Alcon and S&P Global — as part of a significant portfolio overhaul.