From Pershing’s Q3 letter.
The reason for the post is I have gotten many email over the past few weeks asking “should I sell my Sears”. I have have said no, and it appears that Ackman agrees based on what was said above.
I sale reason was interesting. At the Value Investing Congress I attended at Ackman’s press briefing he said in a question regarding Sears (SHLD) and any potential activism on his part, “I think when we invest in a company with a controlling shareholder it is their activism we are dependent on”.
In short, Ackman has decided he does not want to invest in situations in which he is powerless to enact the change he wants in the time frame he wants it. Notice he did not say they were bad investments, just that he essentially did not want to NOT be the activist.
Disclosure (“none” means no position):Long SHLD
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7 replies on “Ackman Discusses Sears Sale”
Todd – if it were a good investment, he would not have sold 5.5m shares at a considerable loss. Agree?
I think you’re missing Ackman’s point: he invests in companies where he takes an activist role because he believes he can / will drive enough change to make money within a specific time horizon. He does not invest in companies where he cannot take an activist role because he does not believe he can affect change and therefore will not make money within his specified time horizon.
If the long-term view of the company is especially bright, I would think an activist investor like Ackman wants to stay in investments like SHLD because of faith in ESL. His sale is a vote of no confidence in my book.
bill,
the filing was as of 9/31…. if he sold mid sept, he lost nothing or very little as sears was over $100 then..
yes, i get the whole activist thing and thought i stated that (maybe not very well?)
he did say he “saw greater opportunities elsewhere, wachovia….he doubled his cash in a little over a month.
could not have done that with sears, or any other retailer for that matter
fair enough. his posture is much more short term and he believed he could get a better return elsewhere.
but wouldn’t current pricing suggest he re-enter the stock? I mean, it’s under $30 and worth less than AZO? I’m guessing he hasn’t because he doesn’t believe the stock is attractive enough and that Q3 earnings are going to be dire.
no….
he won’t because he cannot be the activist here..only lampert can…
i think he will triple down on target because he can effect real change there AND, he has lost a ton on it to date…FAR larger losses than sears
ok – but i would think an activist investor wants to make money. i mean, he got into shld because he said he believed in esl. getting out, logically, means he doesn’t (or least that he can make more elsewhere).
i personally believe the deterioration of the current economy forced him to look elsewhere. shld might be a good long term play, but he felt any sort of capitalization was far off in the future and that he could gain a better return in the near term.
agreed…..
i think he can make target do what he wants long before lampert…..
so, are you “following” the money?