Pershing Square Share Discussion Threads

[donald pond] 08/9/2023 07:34

Roundhill have received a takeover bid at a 67% premium. That may focus a few minds on the value of music content and on UMG

[riverman77] 01/9/2023 15:31

The Ichan vehicle seems to have taken advantage of its permenant premium to continually issue new stock to fund the high dividend. Trouble is I can't see how this can work indefinitely and at some point has to come crashing down.

[srichardson8] 01/9/2023 15:22

I expect you all know about this. It was news to me. Apologies if I am stating the obvious.

WSJ 13th Aug
Carl Icahn Should Be Sailing Into the Sunset. Instead, He’s Scrambling to Save His Empire.
A short-seller attack nearly halved the value of the legendary investor’s company and sapped his cash

Basically a short attack from Hindenberg saying they (IEP) have falsely maintained a high dividend - which Icahn has now halved. Yet it still seems to trade on a silly premium. Equity was $7bn in the latest quarterly release, market cap is still $17bn. Icahn owns 85%. What is Ackman's holding of PSH?

P.S. I wouldn't think a probable transport strike and another government funding crisis this month will do much for Treasuries s-t?

[jellypbean] 23/8/2023 17:33

I've been interested in how the Icahn vehicle trades at a big premium, vs PSH on a discount. So I got into a discussion on another stock site and I questioned the sustainability of the IEP distribution. This got me muted indefinitely on that site. Kind of answers my question I think. Not sure if this means anything for PSH though.

[jellypbean] 23/8/2023 17:30

I've been interested in how the Icahn vehicle trades at a big premium, vs PSH on a discount. So I got into a discussion on another stock site and I questioned the sustainability of the IEP distribution. I'm now muted indefinitely in that site. Kind of answers my ueztion I think.

[rickyl1] 21/8/2023 19:44

I was thinking the same but can't get my head round it.

[jellypbean] 21/8/2023 15:37

Anyone clever enough to be able to work out from the latest report how much the value of the 30 yr hedge is likely to move with every 0.1% change in yield on the bonds?
There didn't seem to me to be enough info to figure it out.

[williamcooper104] 09/8/2023 07:42

ZROZ is a good one too It's long tenor zero coupon treasuries ETF - so it's got a duration (from memory) of about 25-27 v TLT at c17

[donald pond] 09/8/2023 07:28

Interesting news story today about UMG and GOOG teaming up to provide an AI music app that generates licence fees. Makes sense to get ahead of the AI train.

[jellypbean] 03/8/2023 13:09

UL3S is up 13% in a month (3x leveraged inverse ETF for 30 yr Treasuries).

[jellypbean] 03/8/2023 12:53

This is not unexpected, as he's previously said he expected long term inflation to be sticky. Presumably the trade was made before Fitch downgraded US debt? Still, it's a rather odd way of finding out what one is invested in, as 30 year bond prices are already materially down this week.

[riverman77] 03/8/2023 12:43

At least in the short term I see more of a risk of a recession, leading to much lower inflation, which would drive yields back down as the Fed start to cut. I think the things raised by Ackman are probably longer term factors that could drive inflation higher over perhaps the next 10 years. The risk with his new hedge is that we see a sell off in equities and a rally in Treasuries.

[thruxie] 03/8/2023 12:30

I’ve been buying long term bonds. So I guess I’m betting on the other side to Bill then. However I also hold PSH.

Not unduly worried I’m getting paid 4% to hold while I wait for rates to come back down next year.

[donald pond] 03/8/2023 09:07

It is good to have access to Bill's expertise at times like this. It's not an absolute positive in that I suspect if the long end is repriced equities will fall but if that happens he will no doubt make enough to cover losses on the long book and buy into his favourites at lower prices

[williamcooper104] 03/8/2023 08:22

Or just buy puts on TLT

[williamcooper104] 03/8/2023 08:20

Interesting If you want to try this at home You can buy call options on TMV (3x inverse levered 20 year treasury) I wouldn't buy the ETF as leveraged/daily rebalancing can really hurt, plus it could go just as violently the wrong way; so at least with the call you know the most you can lose

[rickyl1] 03/8/2023 08:10

Goes on to say......We implement these hedges by purchasing options rather than shorting bonds outright. This makes it easier to sleep at night as it makes your downside finite. Our sleep-at-night test' is a critical risk management tool.

[rickyl1] 03/8/2023 08:09

Ackman on Twitter explaining latest hedge.....I have been surprised how low US long-term rates have remained in light of structural changes that are likely to lead to higher levels of long-term inflation including de-globalization, higher defense costs, the energy transition, growing entitlements, and the greater bargaining power of workers. As a result, I would be very surprised if we don't find ourselves in a world with persistent ~3% inflation. From a supply/demand perspective, long-term Treasurys (T) also look overbought. With $32 trillion of debt and large deficits as far as the eye can see and higher refi rates, an increasing supply of T is assured. When you couple new issuance with QT, it is hard to imagine how the market absorbs such a large increase in supply without materially higher rates. I have also been puzzled as to why the @USTreasury hasn't been financing our government in the longer part of the curve in light of materially lower long-term rates. This does not look like prudent term management in my opinion. Then consider China's (and other countries') desire to decouple financially from the US, YCC ending in Japan increasing the relative appeal of Yen bonds vs. T for the largest foreign owner of T, and growing concerns about US governance, fiscal responsibility, and political divisiveness recently referenced in Fitch's downgrade. So if long-term inflation is 3% instead of 2% and history holds, then we could see the 30-year T yield = 3% + 0.5% (the real rate) + 2% (term premium) or 5.5%, and it can happen soon. There are many times in history where the bond market reprices the long end of the curve in a matter of weeks, and this seems like one of those times. That's why we are short in size the 30-year T - first as a hedge on the impact of higher LT rates on stocks, and second because we believe it is a high probability standalone bet. There are few macro investments that still offer reasonably probable asymmetric payoffs and this is one of them. The best hedges are the ones you would invest in anyway even if you didn't need the hedge. This fits that bill, and also I think we need the hedge.

[donald pond] 02/8/2023 08:54

There is currently a real disconnect between the equity and bond markets. It's the sort of discrepancy that Bill normally finds a way to exploit.

[haroldthegreat] 30/7/2023 21:03

This has come a long way since I started the thread in 2017 . £10 to £30.

[rickyl1] 27/7/2023 14:14

I think BA likes it that way. It stops people just copying his portfolio and added to the hedging makes it different from the rest. Having said that, it hasn't helped with the discount.

[donald pond] 27/7/2023 09:16

Yes, for a trust that only holds a handful of long term investments it's not exactly transparent. There's also iirc an option to buy more UMG but I don't recall if the terms were ever disclosed

[jellypbean] 27/7/2023 08:55

It's becoming quite important to know what it was they sold down to raise that 0.5Bn cash!

[donald pond] 27/7/2023 08:39

Big beat at UMG but a miss at chipotle. Overall should be good though

[nexusltd] 26/7/2023 18:47

@jellybean. Thanks. Curious.

hxxps://investor.howardhughes.com/2023-07-18-THE-HOWARD-HUGHES-CORPORATION-R-ANNOUNCES-CREATION-OF-HOLDING-COMPANY-STRUCTURE
HOUSTON, July 18, 2023 /PRNewswire/ -- As previously announced by the Company on July 17, 2023, the Board of Directors of the Company has authorized the Company to proceed with the implementation of a holding company reorganization, which will involve the incorporation of a new holding company that will become the new parent company of the Company and will replace the Company as the public company trading on the New York Stock Exchange. The Company has determined that the name of the above-referenced holding company will be "Howard Hughes Holdings Inc." The Company will continue to trade under the symbol "HHC" until and on the effective date of the reorganization, which is Friday, August 11, 2023. Commencing on Monday, August 14, 2023, the new holding company will trade under the ticker symbol "HHH".

The Company believes that implementation of the reorganization will promote the growth of its businesses, including by providing additional flexibility to fund future investment opportunities and to segregate assets and related liabilities in separate subsidiaries.