In a surprising turn of events, billionaire and investor Bill Ackman has canceled the planned IPO of the closed-end fund Pershing Square USA. Just a few months ago, Ackman had predicted that it would be one of the largest stock market debuts of all time. The stock was originally supposed to be listed on the New York Stock Exchange this week, but Ackman postponed the launch following a final promotional round with investors of his hedge fund Pershing Square Capital.
This decision follows a challenging week for Ackman, in which the IPO financing goal was reduced from $25 billion to $2 billion and a key investor withdrew. In a letter to investors, later published in a regulatory filing, Ackman had attempted to stir interest. Despite the alleged "enormous investor demand," Ackman ultimately decided that investors would be better served by investing in the secondary market after the IPO.
Ackman, founder and CEO of Pershing Square Capital Management, stated in a statement that these considerations had inspired the company to rethink the structure of Pershing Square USA (PSUS) in order to clarify the investment decision for the IPO. Pershing Square declined to comment further.
A participating banker described the situation as "not normal" and praised Ackman for having tried something very different, even if it didn't work this time. He is confident that Ackman will consider other avenues and opportunities.
Last week’s letter also announced $150 million in investment commitments from the Boston hedge fund Baupost Group and $60 million from the Teachers Retirement System of Texas. However, a few days after the publication of the letter, Baupost withdrew, which could undermine the confidence of other potential investors.
Anchor investors are often used to signal strong interest in an IPO and to create a positive trading environment in the secondary market. It is rare for an anchor investor to withdraw shortly before the IPO, and this would have weakened the sales arguments for other investors.
Ackman has increasingly used social media in recent months and regularly published political opinions on the platform X. He presented his online presence to investors as a potential advantage for the IPO, particularly for small investors who otherwise would not have access to the returns of Pershing Square.
