Bill Ackman is going to have one of his profitable years since 2009, courtesy to Burger King Worldwide Inc (NYSE:BKW) and Herbalife Ltd. (NYSE:HLF). Much can be attributed to the presentation Ackman gave in July under which he tried to expose a fraud in the structure of Herbalife Ltd. (NYSE:HLF). Despite of the failed presentation, he was able to generate hype about this company.
Herbalife Ltd. (NYSE:HLF) lost nearly 26% share value after a disappointing quarterly result. For Ackman, his $1 billion bet against the company has certainly brought him fortunes, as he predicted that the company’s share would collapse. He even claimed that the company was running a pyramid scheme to benefit from its shareholders and investors. Herbalife Ltd has declined any such claims and even rejected Ackman’s research. Further, there are speculations that Ackman is active in options trading of Herbalife, which witnessed some unusual activity last Friday. A premium of $50 million was paid in Herbalife Ltd. (NYSE:HLF) option trade indicating that the party was certain about the crash down of company’s stock in the upcoming few month.
Pershing Square Capital Management made a huge profit with the upward rally of Burger King Worldwide Inc’s (NYSE:BKW) shares and Ackman’s hedge fund made nearly $203 million out of this transaction. Burger King Worldwide Inc’s (NYSE:BKW) witnessed an upward rally after its announcement to merge with Tim Hortons Inc. (USA) (NYSE:THI). According to Bloomberg’s report, Pershing Square’s 10.9% stake in Burger King Worldwide Inc (NYSE:BKW) reached $1.24 billion in market value. Burger King’s shares have rallied to a new high of $32.40 on August 26 2014 with 19.51% price gain. At the end, despite of failed presentation against Herbalife, Ackman’s fund has outperformed the market and offer excellent results to his investors. (See Bill Ackman’s entire holdings here).
This article has been written by Prakash Pandey.