Billionaire investor Bill Ackman has canceled the initial public offering (IPO) of Pershing Square USA just days before its planned debut on the New York Stock Exchange. The decision follows a series of last-minute changes and regulatory scrutiny.
Pershing Square USA, Ltd. Withdraws IPO
New York, July 31, 2024 //- Pershing Square USA, Ltd. (“PSUS” or the “Company”), today announced that it is withdrawing its previously announced Initial Public Offering (the “IPO”) of common shares of beneficial interest. Bill Ackman,…
— Bill Ackman (@BillAckman) July 31, 2024
Key Points
- IPO Cancellation:
- The IPO was set to launch, but Ackman pulled the plug after reevaluating the fund’s structure.
- The cancellation came shortly after Ackman had downsized the IPO plans, indicating potential issues with investor interest and compliance.
- Investor Communication:
- Ackman announced the decision on the social media platform X, where he has a large following. He cited the need to “launch a revised transaction” as the reason for the cancellation.
- He later posted that the decision was made after devising a better structure for the fund.
- Background on Pershing Square USA:
- The fund was intended to mirror investments from Ackman’s hedge fund, targeting U.S.-based investors, including retail customers.
- Initial plans suggested the fund could raise up to $25 billion, making it one of the largest IPOs in recent years.
Context
- Challenges with Closed-End Funds:
- Closed-end funds like Pershing Square USA have been less popular recently because they often trade at a discount compared to the value of their holdings.
- Industry data shows a decline in new closed-end fund launches, with none in the previous year and only six in 2022.
- Next Steps:
- Ackman and his team plan to revisit the structure of the fund and potentially launch a revised version in the future. Details on the new structure and timing have not been disclosed.
Implications
- Market Impact:
- The cancellation highlights challenges in attracting investors to closed-end funds in the current market environment.
- It also underscores the importance of regulatory compliance and investor confidence in launching new financial products.
- Future Outlook:
- Investors and industry watchers will be closely monitoring Ackman’s next steps and any new announcements regarding the structure and timing of the revised fund launch