Bill Ackman's Major Offensive: IPO of Pershing Square Put on Hold

Bill Ackman, the billionaire hedge fund manager and founder of Pershing Square, has unexpectedly postponed the initial public offering (IPO) of his new US investment fund, Pershing Square USA. This decision came just days after he admitted that he would raise far less capital through the planned listing than originally targeted. Ackman urged investors to stick with the endeavor despite the setback. The postponement marks a significant setback for Ackman, who had hoped to raise $25 billion—an amount that would have made the IPO one of the largest in history. In a recently sent investor letter, however, Ackman stated that the collected information regarding the listing exceeded expectations and could potentially violate regulatory provisions. In the letter, Ackman mentioned potential trading activities and an increasing number of orders for the shares post-IPO. Involved in the deal are prominent banks such as Citigroup, UBS, Bank of America, and Jefferies, which are now monitoring whether the information raises concerns with the U.S. Securities and Exchange Commission (SEC). Another source pointed to "a problem" with a document that might be related to the letter. Despite this delay, the company is expected to continue its efforts to go public. Pershing Square announced late Friday that the IPO will proceed, with pricing to be disclosed at a later date. A company spokesperson declined to answer specific questions regarding the letter or potential regulatory issues. Representatives from Citi declined to comment, while UBS, BofA, and Jefferies did not immediately respond. Ackman emphasized in his letter: "We believe the most important factor for creating long-term value for Pershing Square USA is not the size of the IPO, but rather how the shares are traded in the market." He added: "This transaction is thus about a successful IPO from day one and subsequent trading at a premium." The SEC imposes strict limits on how companies can market themselves before going public to protect potential investors. Companies are usually cautious about making forward-looking statements that could make them liable. The New York Stock Exchange only released a brief notice on its website that the planned IPO had been postponed, without providing further details. In another move, Pershing Square USA stated in a regulatory filing that Ackman's comments in the investor letter had not been reflected in the regulatory documents. Originally, Ackman had planned to reduce the IPO size from $25 billion to a range between $2.5 billion and $4 billion. In his letter, he pointed out to investors that they could support Pershing Square by placing their purchase orders with the banks as quickly as possible. In recent weeks, he had also revealed that potential investors were questioning whether PSUS shares would trade at a premium compared to their managed net asset value. This was a central point in Ackman's marketing strategy. The plan was to price the shares on Monday, with trading commencing the following day on the New York Stock Exchange. The closed-end fund plans to invest in large companies that Ackman and his team consider undervalued and competitive.