Bill Ackman’s big bet against university presidents

By Calder McHugh

Bill Ackman, CEO and founder of Pershing Square Capital, on the floor of the New York Stock Exchange on Nov. 10, 2015. | Richard Drew/AP

TIP OF THE SPEAR — A tracking shot that’s a collision between the Goodfellas Copacabana scene and Spinal Tap lost backstage follows hedge fund manager Bill Ackman backstage, and we hear him in a voiceover.

“This will be the most important presentation I’ve made in my career. So how’s that for raising expectations,” Ackman says.

“What are we going to learn?” he’s asked.

“You’re going to learn why Herbalife is going to collapse.”

The dialogue is the opening to “Betting on Zero,” a 2016 documentary that came out in the midst of Ackman’s almost six-year campaign against Herbalife, a company he tried to prove was a pyramid scheme through perpetual public appearances, presentations and documentation. Ackman invested over $1 billion in his short position, but after other Wall Street bigwigs lined up on the other side and regulatory agencies didn’t act quickly or strongly enough for his taste, Ackman abandoned the unsuccessful investment by 2018. In his hedge fund Pershing Square’s 2021 annual report, Ackman swore off the practice of short selling in general, saying “we have retired from this line of work.”

Well, sort of. Ackman is revving up his old tricks again, betting big on an uncertain outcome and relentlessly pursuing his quarry. Since Harvard President Claudine Gay, Penn President Elizabeth Magill and MIT President Sally A. Kornbluth testified on antisemitism on their campuses in front of Congress on Dec. 5 — a disastrous joint appearance that was almost universally panned for its legalistic tone — Ackman has led the charge for their resignations.

He’s done so by happily adopting the role of the tip of the spear in public accusations of impropriety against Gay, Magill and Kornbluth, with a particular focus on his alma mater of Harvard. When Magill resigned on Dec. 9, Ackman posted a simple message on X (formerly known as Twitter): “One down.”

In fact, Ackman — a Harvard grad himself — has waged his public war against Gay and Harvard’s board largely on the social media platform, where he has nearly 1 million followers. Since the university presidents’ testimony, Ackman has posted or reposted others 166 times on X at time of publication. Of those posts, 145 have been directly about the controversy surrounding the presidents and 12 have been about the conflict in Israel not mentioning a college campus. The nine left over have been on topics like Ukraine, reminding his followers not to fall for fake “Bill Ackman” accounts on other platforms, Hunter Biden and the code that he’s living by as he tries to take down Gay: “the pen is more powerful than the sword.”

As Ackman’s campaign to oust Gay, in particular, has evolved, he’s also widened his aperture. While his first complaints about her were narrowly focused on her congressional testimony, Ackman has in recent days latched onto reporting concerning plagiarism in her dissertation — the Harvard Corporation has since cleared her of “research misconduct” but did say it found instances of “improper citation.” He’s also raised concerns about Harvard’s DEI office, and said “I learned from someone with first person knowledge of the Harvard president search that the committee would not consider a candidate who did not meet the DEI office’s criteria.” He’s posted critiques of Gay from a vast array of sources — from New York Democratic Gov. Kathy Hochul to former Trump Secretary of State Mike Pompeo to Alan Dershowitz to Dr. Phil.

All of these actions are reminiscent of Ackman’s investment strategy: draw attention to your side of the story, move the market, cash out. It’s worked for him in the past — he was a crusader against MBIA, a municipal bond insurer that went bust in the 2008 financial crisis — but it’s also led to his most public failure, with Herbalife. Before he gets on stage in “Betting on Zero,” Ackman insists to advisors “the [Herbalife] stock’s not going up [after my presentation]. The question is whether it opens again.” But as he wraps up his three-hour presentation and takes off his microphone backstage, a voiceover returns, this time from a financial analyst on TV. “He’s trying to make his wish materialize, and [investors] weren’t impressed. In fact, shares rose more than 23 percent, coming in at six-year highs.”

At the moment, his strategy to ratchet up the pressure on Harvard is also not working. Harvard’s highest governing board released a statement Tuesday standing by Gay; Ackman attributes this at least in part to his activism. “I have been told now by two reporters that one of the factors that made it challenging for the Harvard board to fire Gay was that they were concerned it would look like they were kowtowing to me,” he posted on X.

So, Ackman is well aware that his hard charging attacks on Gay can actually have the opposite effect, further entrenching the Harvard president’s position. But he also knows — from his many decades rooting around for what he sees as bad actors and promoting good ones — that pressure campaigns are a long game that can take years to pay off. On Tuesday, in response to a New York Times article concerning his “years of resentment” against the school, Ackman wrote 1,600 words on X explaining what he called a false premise from the Times. He separately complained about the Harvard alumni association supporting Gay without polling its members, and he highlighted a thread about “higher eds ideology problem.”

Just like with his high-profile stances in the investment world, Ackman shows no signs of relenting.

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The court affirmed two lower court rulings without determining whether Trump falls under the insurrection clause in the Constitution’s 14th Amendment. “Who to place on the primary ballot is determined by the political parties and the individual candidates,” the appeals court said in a 3-0 opinion, citing Michigan law. The court further said Trump’s possible spot on a general election ballot was not ripe for consideration.

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Ukraine's President Volodymyr Zelensky, European Council President Charles Michel and European Commission President European Commission Ursula von der Leyen give a joint press conference during an EU-Ukraine summit in Kyiv on Feb. 3, 2023. | Sergei Supinsky/AFP via Getty Images

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The leaders also want to approve a €50 billion ($54.95 billion USD) lifeline for Ukraine’s war-struck economy.

Also on the agenda are the EU’s long-term budget, defense, Russia sanctions, the Middle East — and anything else the leaders decide to talk about.

Kyiv still has a long way to go, though.

In total, after a country is granted candidate status, the accession process consists of four steps, which all require unanimous approval from EU leaders. The first one, the decision to open the negotiations, was taken tonight.

Next, leaders will have to decide on the negotiating framework for the talks so that Ukraine can prepare to implement EU laws and standards. The framework is based on a proposal from the European Commission, and has to be approved by member countries. After the negotiations are finished, the Commission gives its opinion on whether Ukraine is ready to join the EU, which then has to be unanimously approved by all member countries as well as the European Parliament.

Then, finally, leaders from the 27 member countries as well as Ukraine will convene for an intergovernmental conference, during which they will all sign an accession treaty. The accession treaty then has to be ratified by all member countries, which is usually either done by national parliaments or through a referendum.

President Volodymyr Zelenskyy was still celebrating the success of the historic Ukraine decision, the first step in the longer process. “This is a victory for Ukraine. A victory for all of Europe. A victory that motivates, inspires, and strengthens,” Zelenskyy said minutes after the decision was made public by European Council President Charles Michel.

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On this date in 1978: U.S. Treasury agents load boxes of files and records from New York nightclub Studio 54 into trucks to transfer to government offices. Co-owner of the nightclub Ian Schrager was arrested earlier for cocaine possession during an IRS search of the club's books. The owners of the club ultimately pled guilty to tax evasion. | AP

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