Ackman said last year’s sharp drop reminded investors that stocks can “trade at any price in the short term” which underscores why his firm shies away from using margin leverage. “We expect that there have been many margin loan liquidations in recent weeks which have contributed to dramatic stock price declines.”
Late last year, Ackman cut the firm’s position in candy maker Mondelez by selling forward contracts representing 15 million shares at an average price of $44 a share. During the summer the firm built a large notional short position in the Chinese yuan to guard against weakness in the Chinese economy. But so far, he has made only a modest profit.
Ackman also said that Paul Hilal, a partner at the firm and Ackman’s college roommate, is leaving the firm to pursue his own venture, which Ackman said he expects to participate in at some point. As for himself, Ackman is sticking with his firm, noting that he has no plans to step down.