Bill Ackman, Founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC
Billionaire hedge fund manager Bill Ackman said his Pershing Square built a 6% stake in Domino’s Pizza and traded his Starbucks bet.
Ackman announced that his hedge fund had sold Starbucks after the coffee chain quickly recovered from the pandemic, while also raising Domino’s shares after a pull-out.
“We sold Starbucks. It came at a price where it was difficult to get the excess return we’d like to deserve … The stock just rallied too quickly,” Ackman said Wednesday during the Future of Everything festival on Wednesday Wall Street Journal.
For a brief moment, the investor said Domino’s stock “fell dramatically in price for reasons we didn’t understand and we were able to trade Starbucks for Domino’s pizza”. He said he started buying for around $ 330 a share.
“We didn’t get as much as we’d like, but we own a little less than 6%,” added Ackman.
The hedge fund manager has been betting heavily on the comeback in the restaurant, retail and hotel industries. His top positions late last year included Lowe’s, Hilton, Restaurant Brands and Chipotle.
Domino’s Pizza stocks rose more than 3% to their daily high of around $ 435 apiece after Ackman’s remarks. Starbucks stock fell 1.5% on Wednesday.
By the end of 2020, Pershing Square owned Starbucks worth more than $ 1 billion. After hitting a pandemic low in March 2020, Starbucks shares quickly returned, ending the year more than 20%.
Ackman said he was optimistic about Domino’s landmark moves in terms of technology and delivery. The stock is up more than 13% in 2021.
“Domino’s is a pure franchise company and, interestingly, they were the first to invest in technology and delivery,” he said. “They own their delivery infrastructure and do not have to rely on the world’s DoorDashes.”
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