Bill Ackman: Biden or Trump can't solve the market's uncertainty problem

Billionaire investor Bill Ackman explains what a Special Purpose Acquisition Company is and his view on the American economy.

Posted: Jul 23, 2020 8:41 AM
Updated: Jul 23, 2020 8:41 AM

Hedge fund billionaire Bill Ackman, who said in March that "hell is coming" for the US economy, is now warning of another risk.

"Regardless of who our next president is, whether it's President Trump or Biden, there's going to be uncertainty, and uncertainty from a business point of view," Ackman told CNN's Christine Romans on Wednesday.

Investors have a lot to chew on with the Covid-19 pandemic, an unprecedented recession, the presidential election in November and renewed US-China tensions.

Ackman thinks it's unrealistic to bet on a coronavirus vaccine before next year. As for the rest of 2020, the economic recovery will ebb and flow, he said, with rebounds at varying speeds across different parts of the country.

"My view is the second half of 2021 things are coming back to look normal," Ackman told CNN.

Although companies in certain Wall Street sectors have deep enough pockets to withstand the current recession, smaller businesses are at great risk. These smaller companies are a crucial driver of the US economy and they need protection during this crisis, Ackman said.

But Ackman has at times been labeled a pandemic profiteer, after disclosing that his hedge fund Pershing Square made $2.6 billion during the March stock market rut. He was quoted in March warning that "hell is coming" for the US economy -- after he made a substantial bet against the market.

His latest venture, a billion-dollar 'blank check' company that began trading on the New York Stock Exchange Wednesday under the ticket PSTH.U', raised $4 billion at $20 per share and traded up some 8% up during Wednesday's session.

Now it's unicorn hunting season for Pershing Square Tontine Holdings, the newly IPOed funding vehicle of Ackman's hedge fund. The investment vehicle — or special purpose acquisition company — will merge with companies it wants to invest in and thereby take them public.

"It's a way for us to take a private company public and to inject five billion dollars of cash into a private company, either to pay down debt, to accelerate growth, to buy out some investors who are looking for liquidity," Ackman said.

The process is more efficient than a traditional IPO, which includes extensive regulatory filings and a roadshow, he added. And this isn't exactly a great climate for an initial public offering.

"Uncertainty is the enemy of the IPO process," he added.

Plus, "there are more privately owned family businesses that are worth $10 billion, and more now, than ever before in history," which makes investing in a private company very appealing, he said.

A mature 'unicorn' -- that is a more developed but innovative business -- "is probably the sexiest category" to look at, Ackman said.

Minnesota Coronavirus Cases

Data is updated nightly.

Cases: 445047

Reported Deaths: 5955
CountyCasesDeaths
Hennepin924911470
Ramsey39703735
Dakota32788331
Anoka30811360
Washington20004225
Stearns17775185
St. Louis13546240
Scott1189996
Wright11548102
Olmsted1035775
Sherburne815765
Carver691436
Clay648478
Rice600166
Kandiyohi552871
Blue Earth538033
Crow Wing479673
Otter Tail453464
Chisago449732
Benton416785
Winona386246
Douglas372466
Nobles366746
Mower362328
Goodhue343657
Polk327756
McLeod323144
Morrison310043
Beltrami308746
Lyon299835
Itasca282643
Becker281738
Isanti281141
Carlton278143
Steele27119
Pine265113
Freeborn241320
Todd230929
Nicollet223336
Brown213734
Mille Lacs212845
Le Sueur208515
Cass206123
Meeker198533
Waseca188816
Martin169126
Wabasha16883
Roseau165316
Hubbard148338
Redwood139227
Renville136539
Houston135313
Dodge13304
Chippewa130832
Cottonwood126518
Fillmore12215
Wadena119416
Rock109512
Sibley10797
Aitkin107133
Watonwan10618
Faribault104615
Pennington97715
Kanabec97218
Pipestone93823
Yellow Medicine93314
Murray8655
Jackson85010
Swift83018
Pope7355
Marshall70115
Stevens6978
Clearwater68514
Lac qui Parle65616
Lake62915
Wilkin6229
Koochiching59010
Lincoln4821
Big Stone4543
Unassigned43468
Grant4257
Norman4228
Mahnomen4087
Kittson37019
Red Lake3164
Traverse2473
Lake of the Woods1801
Cook1130

Iowa Coronavirus Cases

Data is updated nightly.

Cases: 303065

Reported Deaths: 4267
CountyCasesDeaths
Polk45335447
Linn17673274
Scott15356163
Black Hawk13648236
Woodbury12945175
Johnson1202149
Dubuque11300149
Pottawattamie8934112
Dallas881171
Story863434
Webster467471
Cerro Gordo462968
Sioux453356
Clinton448361
Warren437538
Marshall425561
Buena Vista391529
Muscatine386177
Des Moines380641
Plymouth348868
Wapello340898
Jasper319658
Lee313530
Marion301752
Jones269649
Henry263230
Carroll253034
Bremer242048
Crawford228122
Boone216217
Washington214231
Benton208544
Jackson190831
Mahaska190736
Tama185657
Dickinson184226
Delaware172236
Kossuth170543
Clay166019
Wright162724
Fayette159522
Buchanan158023
Hamilton157829
Winneshiek154819
Harrison154462
Hardin153929
Cedar151419
Clayton150748
Butler146424
Page143715
Cherokee138127
Floyd137936
Mills136016
Lyon133632
Poweshiek132324
Hancock128824
Allamakee126827
Iowa122822
Calhoun12209
Grundy120026
Jefferson119524
Madison11869
Winnebago118229
Mitchell115634
Louisa114130
Cass112541
Chickasaw110512
Emmet110231
Sac110215
Appanoose109638
Union108122
Humboldt104219
Guthrie102224
Shelby101326
Franklin101218
Unassigned9210
Palo Alto9019
Keokuk84325
Montgomery84022
Howard82519
Monroe80518
Clarke7817
Pocahontas77211
Ida73830
Greene6887
Davis68721
Adair68620
Lucas6468
Osceola6349
Monona63316
Worth5983
Taylor5919
Fremont5036
Van Buren49412
Decatur4784
Ringgold4269
Wayne41421
Audubon4108
Adams2953
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