Investor Ackman tweets to Trump: Close down the country
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[March 19, 2020] By
BOSTON (Reuters) - Billionaire investor
William Ackman, who has long worried about risks posed by the
coronavirus, called on the Trump administration on Wednesday to seal off
the country for 30 days and said stocks would "soar" if such
restrictions were imposed.
"The only answer is to shut down the country for the next 30 days and
close the borders," Ackman said in a post on Twitter, adding: "Tell all
Americans that you are putting us on an extended Spring Break at home
Ackman also said he had bought stock in private equity group Blackstone
Group as well as portfolio companies his hedge fund Pershing Square
Capital Management already owns, including Hilton Worldwide Holdings.
Ackman, who has some 48,900 Twitter followers but rarely tweets, took to
President Donald Trump's preferred communication platform to publicize
his plan for proposed action.
After markets closed with fresh losses and the Dow wiped out the last of
its gains put on since Trump was inaugurated, Ackman told Reuters
shutting down U.S. borders for 30 days was the only way to limit the
virus' spread and save industries on the verge of collapse.
"If President Trump were to go on television, with no one standing next
to him, and say that he is shutting everything down and tell people to
work from home and stay at home for 30 days, this thing could be killed
and markets would soar. It might take some time for markets to recover
but I'm confident they would recover fully," he said.
Ackman who normally considers himself an optimist began worrying about
the effects of the virus weeks ago and said he began preparing
personally and professionally for a pandemic that he estimated could
kill between one and two percent of the world's population.
"People need to be scared and take this seriously," he said, urging the
government to essentially force most Americans to stay home for a month.
Without people wandering around outside, the virus' re-infection rate
would be killed, he said, adding "and then you kill the virus ... 30
days would give us a cushion."
Ackman has ties to top banking and money management executives around
the world and has attended U.S. central bank investor advisory committee
meetings on financial markets. But he has no special relationships with
the Trump administration and has not reached out to anyone behind the
scenes, he said.
[to top of second column]
William 'Bill' Ackman, CEO and Portfolio Manager of Pershing Square
Capital Management, speaks during the Sohn Investment Conference in
New York City, U.S., May 8, 2017. REUTERS/Brendan McDermid/File
Ackman broadcast his policy prescription in an emotional interview with CNBC on
Wednesday and then again on Twitter.
I am sure "the president will do the right thing in temporarily shutting down
the country and closing the borders. If that happens, we can win the war against
the virus," Ackman tweeted.
The White House responded by saying that Trump has ensured that all Americans
would be taken care of, including affected industries and small businesses, CNBC
Ackman is especially concerned about the hotel, airline, restaurant and auto
industries, saying they may not have a long life line.
"Hotels rent rooms for a night and if no one comes, they are done," he said. He
called Hilton a "canary in the coal mine," and warned that without fast action
the hotel industry could tumble to zero.
In addition to buying Blackstone stock, Ackman said he had been loading up on
the companies already in his portfolio like Lowe's and Restaurant Brands, as
well as Hilton.
Ackman, who runs $6.5 billion investment firm Pershing Square Capital Management
from New York, moved his family, including his father who has battled lung
cancer, out of the city several weeks ago.
He said he spends a lot of time thinking about so-called black swan events and
began worrying about the coronavirus' potentially catastrophic effects on public
health and the economy many weeks ago.
In an effort to protect his portfolio, Ackman told investors last week that he
had put on a hedge, steps that helped returns swing to gains in early March from
losses in late February.
Last year, Ackman's publicly traded hedge fund surged 58%, making it one of the
industry's best performers. Earlier this year, he sold off a position in
Starbucks before the coffee chain's stock tumbled some 34% amid warnings for
people to avoid restaurants, bars, and coffee shops.
(Reporting by Svea Herbst-Bayliss; Editing by Steve Orlofsky, Bernadette Baum
and Tom Brown)
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