After losing a huge amount of money on Valeant Pharmaceuticals International Inc., it looks like Pershing Square’s Bill Ackman is looking to get liquid by selling off a sizable chunk of snack food maker Mondelez International Inc.
In an email to investors, Ackman said he sold 20 million shares of Mondelez
and now had “substantial uninvested cash.”
At Wednesday’s closing price for Mondelez, that would work out to about $834 million. Shares of Mondelez closed up 0.2% at $41.72 Tuesday, but declined 1.2% to $41.21 after hours. The stock is down 7% year to date.
On Tuesday, Ackman said Pershing Square would take a “much more proactive role” in protecting its investment in Valeant
which shed 51% of its value on Tuesday after the drug company delayed release of its annual report and cut its outlook. With a 9% stake in Valeant at 30.7 million shares, Pershing Square lost $1.09 billion on Valeant’s Tuesday decline alone. Valeant shares are down 67% year to date.
Read:Valeant stock plunges, but J.P. Morgan stays bullish
Pershing Square reported a year-to-date negative return of 26.4% in its weekly net asset value and returns.
The text of the email sent to investors appears below:
Dear Pershing Square Investor:
After the close, we completed a block sale of 20 million shares of Mondelez International. As a result of the sale, we now own a 5.6% stake in the company, are the third largest owner, and have substantial uninvested cash. We reduced our stake because Mondelez had become an outsized position in light of its initially large size and its outperformance relative to other holdings. We continue to believe in the potential for operating improvements and margin expansion that we expect will lead to substantial further increases in value. As a result, it remains our largest exposure. We are reducing the position size for portfolio management purposes only.
We have carefully reviewed the balance of our holdings and have concluded that they are appropriately sized. As such, we have no current plans to sell any of our other investments. Please call the investor relations team or me if you have questions about the above.
View more information: https://www.marketwatch.com/story/bill-ackman-looks-to-get-liquid-by-selling-off-chunk-of-mondelez-stake-2016-03-16