For the first time in a year, Ackman increased his position, "buying the dip", and Nike's stock price soared
Last time Ackman made $100 million by buying Nike, can he profit again this time?
More than a year later, billionaire investor Bill Ackman is making moves again, this time targeting Nike and Brookfield.
Regulatory filings released on Wednesday show that as of June 30, Ackman's hedge fund Pershing Square Capital Management held approximately 3 million shares of Nike and 6.8 million shares of Brookfield. This translates to about 0.19% ownership of Nike and 0.34% ownership of Brookfield.
This is Ackman's additional position after buying into Google's parent company Alphabet in the first quarter of 2023.
In response to this news, Nike's stock price rose over 3% in after-hours trading on Wednesday.
Since January this year, Nike's stock price has fallen by 26% due to weak overall consumer spending in the United States and competition from rivals such as Adidas, On Holding, and Hoka.
With $17 billion in assets under management, Ackman's move to buy Nike suggests that he believes the stock has dropped to a suitable buying level, providing some support to Nike's stock price.
Ackman previously held Nike in 2017 and made a profit of $100 million on the stock. Analysts speculate that Ackman's re-entry into Nike may be a way to quietly pressure Nike's management, as Ackman often likes to drive changes in companies he invests in through shareholder activism to achieve his investment returns.
Ackman previously pressured the management of Chipotle, one of his holdings, to improve food safety issues and in 2018, assisted in hiring Brian Niccol as Chipotle's CEO, paving the way for a subsequent surge in Chipotle's stock price.
Will his "bottom fishing" purchase of Nike this time around yield the results he hopes for?