Saturday, August 6, 2016

So which position will Mr Ackman exit: Herbalife or Valeant

Bill Ackman just exited his large position in Canadian Pacific.

This was a stunningly successful position: genuinely I wish I had done it.

It also produces a very large taxable gain.

Mr Ackman however has been producing less-than-stellar performance for his Pershing Square fund.

So at the moment he is leaving his clients with large losses plus a large tax bill. I can't imagine they would be thrilled with that.

Logically then Bill Ackman will wipe his taxable gain by reducing or exiting one of his large losing positions - either the short on Herbalife or the long on Valeant.

I really don't have any insight into which - but he is on the board of Valeant and that makes moving the Valeant position more problematic.

Thoughts anyone?




John

PS. This observation is not original. I received similar from at least three separate emails.

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