Wall Street Billionaire Made $2.8Bn While Stoking Coronavirus Panic

It appears Wall Street billionaire Bill Ackman tried to sell out his country to make an even bigger fortune during the coronavirus crisis.

A lot of sensational reports suggest hedge fund manager Bill Ackman tried to tank the market for his own gain. While definitely not true, he played a role in stoking the coronavirus hysteria that contributed to his hedge fund’s massive profit. | Image: REUTERS/Brendan McDermid/File Photo

  • “Hell is coming.” Billionaire Wall Street hedge fund manager Bill Ackman made $2.75 billion betting against markets in February.
  • Then he went on CNBC to stoke markets’ coronavirus fears. He gave a hell, fire and brimstone declamation that drove his bets home.
  • Looking over the timeline, what Ackman did isn’t as bad as it sounds in the headlines. But his shady behavior easily could have been.

Billionaire hedge fund manager Bill Ackman has had some explaining to do this week.

After going on CNBC to give a sky-is-falling warning on Mar. 18, Forbes caught on to what was up. Ackman was talking his books for hedge fund Pershing Square Capital Management, with $8 billion assets under management.

In February Ackman’s hedge fund had bought $27 million in bets against the market that were worth $2.75 billion by March 12.

False Reporting on Bill Ackman Story

That’s why coverage of this story by Business Insider, The Guardian and CNBC range from irresponsibly misleading to blatantly false.

CNBC’s Thomas Franck reported:

Bill Ackman warned ‘hell is coming’ because of virus: He then pocketed $2B in bets against markets

That is very misleading. As Ackman explained in a Thursday letter to Pershing Square investors, he bought the hedges in February.

The S&P 500 peaked on Feb. 19 and had already crashed calamitously by the time of Ackman’s Mar. 18 CNBC interview. So he did pocket $2.75 billion after warning hell is coming, but most of it came from before the warning. So Franck and/or his editors’ article makes a sensational, misleading insinuation.

The Guardian’s much looser headline on the Ackman story is blatantly false:

‘Hell is coming’: how Bill Ackman’s TV interview tanked the markets and made him $2.6bn

His interview quite certainly and unequivocally did not make him $2.6 billion. In the first place, he bought the credit default swaps that went from $27 million to $2.75 billion weeks before the interview.

And secondly they didn’t make him all that money. They made it for investors with his hedge fund. Of course he got a piece of the pie.

But with those important, context-setting, less sensational, but more accurate qualifications made– what Bill Ackman did was still shady as hell.

His emotionally-charged, nearly hysterical doom and gloom interview on CNBC may have helped push markets lower through Mar 23. That drove his bets home and squeezed some more profit out of Pershing’s trade.

Wall Street Billionaire’s Coronavirus Profits

This tweet is a despicable attempt to steer public policy for personal profit. Even worse, it’s opportunistic profiteering off of the coronavirus crisis. | Source: Twitter

The market bounced after Monday, March 23 for an impressive rally this week. That was when Ackman made his exit and sold off the credit default swaps to bag massive profits and plow some into the stock market’s bargain bin equities.

But his interview could have incited a panic that continued to send markets spiraling downward. He didn’t make Pershing billions from that interview, but he could have. And that seemed to be his goal.

During the interview Ackman called on President Trump to shut down the entire country for a month. He also tweeted the suggestion that same day. He said if Trump does that, “the stock market will soar, and the clouds will lift.”

This Wall Street billionaire called for 300 million people’s lives and jobs to be frozen for a month. Did he really think that was the best solution for America? Or was he saying it because it would have made him a fortune? It’s hard to believe Ackman was looking out for anyone but himself and his wealthy clients.

He was angling to demolish the American economy to make himself even richer. This is the kind of behavior that makes people despise financiers. And the SEC should breathe down his neck over this one for a while. If they find any T’s not crossed, any I’s not dotted, he should be fined mercilessly.

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.

Last modified: September 23, 2020 1:46 PM

W. E. Messamore: Markets Contributor for CCN living in Nashville, Tennessee. Bachelor of Business Administration from Belmont University in 2009 (majored in Entrepreneurship). Organized Senator Rand Paul's first and second online fundraisers in 2009. Roving editor for the Independent Voter Network since 2013. Email me | Link up with me on LinkedIn | Follow Me on Twitter (followed by: fmr Rep. Ron Paul (R-TX), Sen. Rand Paul (R-KY), fmr NM Gov. Gary Johnson, and Rep. Thomas Massie (R-KY))