Bill Ackman's Pershing Square plunges 18% in NYSE debut

Key Points:

• Bill Ackman's new closed-end fund, Pershing Square USA Ltd. (PSUS), debuted poorly on the NYSE, with shares dropping 18% from its $50 IPO price to close at $40.90 despite strong social media support.
• The fund raised a record $5 billion through its IPO and private placement, aiming to offer hedge-fund-style returns to retail investors and modeled after Berkshire Hathaway's permanent-capital structure.
• Ackman sought to attract long-term retail shareholders by eliminating performance fees and offering shares of his management company as a sweetener, but this approach heightened skepticism about the fund's ability to avoid typical closed-end fund discounts.
• Closed-end funds like PSUS trade on exchanges and do not redeem shares daily, preventing forced liquidations, but they often trade below net asset value, a challenge Ackman aimed to address with his novel structure.
• This launch was Ackman's second attempt after a previous IPO was canceled in 2024 due to weak demand; despite initial enthusiasm on the trading floor, investor response was tepid, reflecting concerns about the fund's structure and market reception.