Bill Ackman's Pershing Square USA flops in its first day of trading

By Gordon Gottsegen

The closed-end fund sank more than 18% from its $50 offering price. Shares of the hedge-fund firm itself struggled, too.

Bill Ackman wagered there would be significant retail-investor appetite for Pershing Square's unusual IPO.

After years of working toward a U.S. IPO, billionaire investor Bill Ackman finally achieved his goal on Wednesday with the public listing of Pershing Square USA (PSUS), a new closed-end fund, and Pershing Square Inc. (PS), his hedge-fund firm itself. However, things didn't go exactly as planned.

Shares of the Pershing Square USA fund sank some 18% as soon as they hit the market. Although the listing price was set at $50, shares traded as low as $40.33 in the minutes after the listing hit the market. Shares of the fund closed at $40.90, down 18.2% on the day.

Pershing Square Inc. also traded lower immediately, falling to $23 per share after opening at $24. The stock ended the day at $24.20 after ranging between $22.01 and $24.49 in its debut session.

The dual nature of Pershing Square's IPO made this a unique event. The firm offered one free share of common stock in Pershing Square Inc. for every five shares of the closed-end fund Pershing Square USA that investors bought during the IPO. In an interview aired on CNBC, Ackman said that this was meant to sweeten the deal for IPO investors. That way, if the IPO of the closed-end fund went well, investors would benefit by holding shares of the company that collects fees from managing that fund.

Ackman also said he specifically wanted to make these shares available to retail investors, and did so by partnering with retail brokerages Robinhood Markets Inc. (HOOD) and Charles Schwab Corp. (SCHW) for the launch.

Background: Bill Ackman is placing a bet on individual investors with dual Pershing Square public offerings

"By bringing Pershing Square USA public, we create a way for anyone who can buy one share to invest with our firm. And it's sort of the democratization of capitalism, something I feel very good about. You know, hedge funds are sort of known for managing money for rich people. And now we have the opportunity for someone with $50 [to] be a long-term shareholder," Ackman said in the interview.

Even with shares of Pershing Square USA having fallen in open-market trading well below that $50 level, Ackman was able to raise $5 billion for his firm. He said that made this the largest IPO for a closed-end fund and the sixth largest IPO in the past decade.

-Gordon Gottsegen

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04-29-26 1717ET