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Bill Ackman: Just Do It

Bill Ackman has made his latest bet - picking Nike as the savior for the Pershing Square hedge fund. Pershing was down 4% in 2017, after falling 20% in 2015 and 13% in 2016. Nike has boosted the fund up for a bit, but again, perhaps Ackman is late to the party. Or, has Ackman learned to stay away from controversial investments after getting taken to task by Chipotle, Herbalife and Valeant Pharmaceuticals. Even losing his boardroom battle at ADP. He’s now looking to stuff some money in a large, installed brand, where he can remain a passive investor.

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Yet, Nike’s fiscal 2018 sales in North America are already from the previous year. As things continue to weaken at Nike, the big question is, will Ackman be able to stay silent?  

Ackman has managed to ride the goodwill of his MBIA win for well over a decade. But at what point do we admit that Ackman’s time has come and gone. He captured much of the run-up in Nike shares, seeing a 30% return on his $9 billion stake. I like Nike, I really do. It’s one of those apparel and shoe brands that will survive, but seeing Ackman in the name makes things a bit salty. Ackman has decent success helping install a new CEO with different growth visions. However, he struggles with contributing meaningfully to current CEOs growth plans. Nike has done well without Ackman and I wouldn’t be too worried about the company and its growth plans unless Ackman decides to get more vocal, then it’s just going to be a distraction for everyone involved. Chipotle has lost about a quarter of its market value since Ackman showed up. Just let Nike do it.