Coronavirus Outbreak: Hedge fund manager claims to have made $2.6 billion betting on markets crashing due to pandemic

Hedge fund manager Bill Ackman has claimed to have made $2.6 billion after betting that the markets would crash due to coronavirus.

The owner of Pershing Square Capital Management appeared on television a few days ago and called for the markets to close.

 Coronavirus Outbreak: Hedge fund manager claims to have made File image of Bill Ackman. Wikimedia Commons.6 billion betting on markets crashing due to pandemic

File image of Bill Ackman. Wikimedia Commons

The 53-year-old wrote a note to his investors on Pershing Sqaure fund’s website and said that they had “completed the exit” of their hedges generating a profit of $2.6 billion.

He had made a bet saying the coronavirus outbreak would crash the market. The American investor had started the hedge on 3 March, and it had cost him about $27 million.

On 18 March, Ackman had tweeted to US President Donald Trump, asking him to declare an “extended spring break” and shutting down “the country for the next 30 days and close the borders”.

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After this Twitter bombardment, Ackman appeared in a CNBC interview to say that he had locked down his office in mid-February and sent his employees home in anticipation of the rapid spread of the virus.

He also said that American companies should stop share buybacks so that they can save cash as “hell [was] coming”. His views changed in the upcoming days as his firm started to relax on its bet and later used the money to buy shares in major firms such as Starbucks and Hilton Hotel Chain.

According to The Guardian, if this profit goes on to be confirmed, it will become one of the most profitable trades ever to be disclosed by a hedge fund.

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Updated Date: Mar 26, 2020 17:16:54 IST