Billionaire investor Bill Ackman hopes to close his mega SPAC deal in a couple of weeks – and continues to hedge against inflation and a market downturn

Bill Ackman, Ackman, William Ackman
Bill Ackman

  • Bill Ackman hopes to close his huge SPAC deal in the next couple of weeks.
  • The Pershing Square chief is hedging against inflation and a market correction.
  • Ackman switched Starbucks stock for Domino’s Pizza based on valuation and likely upside.
  • See more stories on Insider’s business page.

Billionaire investor Bill Ackman hopes to close his mega-SPAC deal in the next couple of weeks, continues to hedge against inflation and a potential market downturn, and swapped out Starbucks for Domino’s Pizza in search of higher returns, he said on an earnings call this week.

Ackman’s “blank-check” company, Pershing Square Tontine Holdings, floated last summer with the goal of spending about $5 billion for a minority stake in a private company and taking it public. The investor revealed earlier this month that he’s been working to buy a piece of an “iconic, phenomenal, great business” since early November, and was close to sealing the deal.

“We’ve done our homework, we like the business, we love the management team, and we are working to complete a transaction,” Ackman said this week. “Hopefully within a couple of weeks or so.”

If the deal falls through, Ackman and his team will turn their attention to a second target, he added.

Ackman, who made a $2.6 billion profit by hedging the pandemic last spring, also weighed in on growing inflation fears and the steps he’s taken to protect his portfolio. He pointed to multiple government-stimulus packages over the past year, and the prospect of pent-up demand being released and savings being spent as the economy reopens, as drivers of higher prices that could spur the Federal Reserve to hike interest rates. That represents a “risk for markets generally,” he said.

The uncertain backdrop prompted his fund, Pershing Square Capital Management, to spend $157 million on interest-rate “swaptions” between December and early February. The position’s value – which ballooned to almost $500 million by the end of March – is still up about 2.5 times, Ackman said.

The Pershing chief also elaborated on why his fund sold a 1% stake in Starbucks and snapped up more than 5% of Domino’s – a position valued at about $750 million as of March 31 and $860 million today. The move was driven by price and potential upside, he said.

“We’re always willing to trade an existing holding at a kind of full valuation for a business of similar quality at a much more attractive valuation,” Ackman said. “That was the thinking behind the switch.”

The investor and his team determined that Starbucks was likely to generate returns in the low double digits, while Domino’s promises long-term returns in the high teens or low 20s, he added.

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Billionaire investor Bill Ackman swapped out Starbucks for Domino’s Pizza last quarter – and trimmed 5 of his 6 other holdings

Bill Ackman
Bill Ackman.

  • Bill Ackman’s hedge fund sold Starbucks and bought Domino’s Pizza last quarter.
  • The billionaire investor pounced when the pizza chain’s stock slumped in March.
  • Pershing Square trimmed its Agilent, Chipotle, Hilton, and Restaurant Brands bets.
  • See more stories on Insider’s business page.

Billionaire investor Bill Ackman swapped out Starbucks for Domino’s Pizza and trimmed all but one of the other holdings in his stock portfolio last quarter, a regulatory filing revealed this week.

Ackman’s Pershing Square Capital Management sold its almost 1% stake in Starbucks, which was worth $1.1 billion at the end of December. The hedge fund also bought more than 5% of Domino’s Pizza – a position valued at about $750 million as of March 31.

Ackman explained the move at a recent Wall Street Journal event. Starbucks stock had rebounded faster than expected, he said, while Domino’s stock slumped in March to its lowest since the pandemic tanked markets last spring.

“We’ve admired it for years, and it was just never cheap enough,” Ackman said about the pizza-delivery chain. “Then for about five minutes, it got cheap. I don’t know who sold or why, but we started buying around $330 a share, and then very quickly it moved up a lot.”

Pershing’s newest position has jumped in value by another 18% since March 31, to over $880 million as of Monday’s close.

Ackman and his team also reduced their stakes in Agilent, Lowe’s, Hilton, and Restaurant Brands by 3% to 4%, and their Chipotle stake by around 6%. In contrast, they boosted their Howard Hughes position by about 23% to 13.5 million shares.

Pershing’s stake in Lowe’s was worth $2.3 billion at the end of March, making the home-improvement retailer its most valuable holding. Its Agilent, Chipotle, Hilton, and Restaurant Brands positions were worth about $1.5 billion each, while its Howard Hughes stake was valued at $1.3 billion. The overall value of its stock portfolio grew 5% to $10.5 billion.

Ackman’s next major update could be related to his $5 billion special-purpose acquisition vehicle, Pershing Square Tontine Holdings. The investor is hoping to announce a deal to buy a minority stake in an “iconic” private business in the next few weeks.

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Domino’s is giving out a free 30-day movie streaming subscription if you order a pizza online

Dominos Cheeseburger Pizza Taco Pizza 14
  • Domino’s is offering a 30-day subscription to streaming service Epix Now if you order your pizza online.
  • The offer is valid up to April 11, and all you have to do is click a link and provide your email — no credit card details are needed.
  • The MGM-owned platform has more than 2,000 movies on offer, including James Bond films, “Pet Sematary,” and “Sonic the Hedgehog.”
  • Visit Business Insider’s homepage for more stories.

Domino’s will give you a 30-day subscription to movie streaming platform Epix Now if you order one of its pizzas online.

Any customer who orders online up to April 11, 2021 will receive free access to the MGM-owned platform.

The subscription won’t automatically continue after the free trial, so you won’t end up accidentally paying for the $5.99 a month service beyond your one month.

Domino’s will include a link on its order confirmation page, confirmation emails, and pizza tracker page that customers simply have to click through. They don’t have to provide any credit card information – an email address is enough, Domino’s says.

Read more: An analysis of hundreds of exec interviews shows TikTok’s impact on a wide variety of companies in 2020 like Spotify, Snapchat, and Netflix

Epix Now has more than 2,000 movies, including James Bond films, “Pet Sematary,” and “Sonic the Hedgehog,” and 300 hours of original series and specials.

“Pizza and movies go hand-in-hand,” Art D’Elia, Domino’s chief marketing officer, said.

If you’re not in the mood for pizza, you can also get a free seven-day trial direct for the Epix Now directly through its app and website.

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