Ack-Math - Dealbreaker


Bill Ackman has another bold numerical prediction.

Money management is a numbers game, and when a hedge fund manager buys a stock, he usually has an idea of what he thinks it should be worth, now and/or in the future. Bill Ackman is a hedge fund manager, and he has occasionally shared his opinion on what number you should multiply a stock price by to get its true value. For instance: Herbalife shares are guaranteed to be worth exactly zero times their current value. Fannie Mae and Freddie Mac Shares would be worth as much as 15 times their value if the courts weren’t annoyingly insistent about the government’s right to bail them out and seize their profits. Valeant: "multiples of the current market price.”


The math has not been kind to Billy on the above. But if you know anything about the Pershing Square chief, it’s that he’s persistent. And so, behold his latest bold guess of how much the latest unfortunate target of his unwanted attentions is worth.

Ackman's Pershing Square firm said if ADP is managed properly, then its earnings per share can rise to $8.70 by fiscal 2022 and its share price "can increase to $221 - $255 per share" in less than four years.

Ah, the if. It’s always about the if. And someone doesn’t think Ackman has a particularly good track record on ifs.

The short-seller Robert Chapman and hedge fund billionaire Bill Ackman are facing off again over a stock.

Chapman told CNBC's Scott Wapner he shorted ADP shares, a bearish bet….

"Making a dollar being short an Ackman stock feels as good as making $10 on one that he is not long," he joked.

Bill Ackman says his ‘transformation plan’ for ADP will more than double its stock price [CNBC]
Short-seller Robert Chapman battles Bill Ackman again; bets against ADP [CNBC]