| | In today’s edition, we look at how the billionaire’s threats against Business Insider are a distract͏ ͏ ͏ ͏ ͏ ͏ |
 | Liz Hoffman |
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Hi and welcome back to Semafor Business. I’ve said before that the criticism being leveled at universities looks, generally speaking, like a boardroom fight. Marc Rowan showed up with 2% of Penn’s stock (roughly the share the university gets from donors) and got its CEO fired. But what’s happened in the past few days looks, specifically, like a Bill Ackman boardroom fight. His escalating battle with Harvard and, now, with Business Insider resembles the burn-it-all-down holy wars that marked his past activist battles — and rarely benefitted the point he was trying to make. Activist investors come in all flavors: the steely Dan Loeb, the outer-borough loudmouth Carl Icahn, the speak-softly-and-carry-a-big-stick ValueAct. Ackman is erudite, transparent, and emotional. He digs as deeply as anyone into a company’s numbers, and his investment ideas are usually actionable and specific, a rung above the “make the stock go up” demands of some others. But Ackman tends to cast them as holy wars, and himself as the reluctant flag-bearer who wasn’t looking for a fight, but uncovered a wrong to be righted. That personal zeal can energize his enemies and make him hang on too long to a losing bet. More on that in today’s issue. Speaking of heavy burdens to bear: I’ll be on the ground in Switzerland next week, and you can sign up for our pop-up Davos newsletter to follow along from the ground or from afar. ➚ BUY: Biotech. J&J, Merck, and Boston Scientific all announced big deals yesterday, and WSJ reports another in the works. JPMorgan’s annual industry conference, underway this week in San Francisco, often brings big deal announcements and plants the seeds of new ones. ➘ SELL: Boeing. United Airlines found loose bolts on its grounded 737 Max jets, the same model that lost a door component during an Alaska Air flight last week. Boeing stock has fallen 8% — more than the days following a second fatal crash in 2019 — and the future of its cash cow is in doubt.  NTSB via Reuters |
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THE NEWS Bill Ackman’s escalating fight with Harvard and, now Business Insider, has followed the arc of his least successful Wall Street crusades: It got personal. A quick recap: Ackman was the loudest member of a chorus of critics that ultimately got Harvard’s president fired, principally over her handling of antisemitism on campus but proximately because she appears to have plagiarized some of her academic work. Then Business Insider found what it described as instances of plagiarism in papers written by Ackman’s wife, Neri Oxman, a celebrity artist and former MIT professor. Ackman has questioned the publication’s motivations and lobbied a board member of its owner, Axel Springer, to retract the story. Since December, Ackman has written some 30,000 words on X about all this. He’s turned his attention to MIT, whose entire faculty he says he’s reviewing for instances of plagiarism.  Reuters/Mike BlakeLIZ’S VIEW To understand what’s happening here, you have to understand Bill Ackman. I wrote about this a bit in my book, which I’ll just quote here in full lest I get dragged into the plagiarism wars: When he lost a battle for control of Target Corp.’s board in 2009, he teared up as he quoted John F. Kennedy. “We will pay any price, bear any burden, meet any hardship,” he told a roomful of Target shareholders. The episode burnished his reputation for pouring his emotions and ego, not just his money, into his ideas. Critics would say it blinded him to reality and caused him to hold on to losing bets longer than was wise. In his yearslong campaign against Herbalife, which Ackman had accused of running a scam that preyed on Hispanic immigrants, he choked up talking about his immigrant grandfather and vowed to take his fight “to the ends of the earth.” Ackman was clearly right: Herbalife later admitted that its reps were making more money by recruiting others than by selling products, a hallmark of pyramid schemes. But his old nemesis, Carl Icahn, propped up the company’s stock price out of spite and Ackman finally bailed in 2019, having lost nearly $1 billion. In 2020, Ackman rightly called out SPACs for enriching executives at the expense of shareholders and launched his own with a much fairer structure. He then spent a year pursuing a deal that was overly complicated and, in regulators’ view, illegal. He returned $4 billion of shareholders’ money with nothing to show for it. His famous “hell is coming” pandemic television appearance was the same thing: a correct thesis — that investors were dramatically misreading the risks of Covid — tinged with a savior complex. He made billions of dollars on the trade, but spent weeks trying to dispel conspiracy theories that he had tanked the market on purpose. Amplifying Ackman’s instincts is X, now an amen chorus for his center-right politics. “People are desperately interested in the truth,” he posted recently. “I think that best explains why I have followers.” That is not, sadly, exactly how it works. Ackman is often quite good at diagnosing the problem. And he has a point here worth debating — whether American institutions (universities, government, boardrooms) have overcorrected on diversity efforts. But he’s a flawed messenger, hampered by personal zeal and a tendency to be too clever by half. I’m surprised Icahn hasn’t endowed a Claudine Gay chair for diversity studies at Harvard by now. Read how student newspapers have covered the drama at their schools. → |
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 U.S. offices are as empty as they’ve been in at least 40 years. New data from Moody’s shows that four years after their workers went home and long after it became clear that a lot of them are never coming back, companies are finally wriggling out of leases and downsizing their space. Demand is still high for new buildings with sun-drenched lounges and roof decks. Older, drabber ones are quickly becoming what one real-estate executive called “leave-behind space.” This is bad news for landlords and their lenders: Almost 40% of commercial mortgages are held by banks, especially the midsized regional banks that are already under stress. |
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 Reuters/Jonathan ErnstThreadfake: SEC chief Gary Gensler’s thread on X yesterday about “things to keep in mind if you’re considering investing in crypto” is being taken as a sign that the agency is about to approve its first bitcoin ETF. A dozen are waiting in the queue, including from leading money managers like BlackRock and Fidelity. The SEC had previously rejected such funds but was overruled by a federal court last year. “This is what capitulation looks like, folks,” one widely followed pro-crypto X user wrote. Bitcoin rose 6% in the hours after Gensler’s post and a decision could come as soon as tomorrow. Supply chain of evidence: A month before the door blew off a Boeing jet, a shareholder lawsuit accused the contractor that manufactured the part, Spirit AeroSystems, of ignoring safety defects. The issue involved the 737’s tail fin, not its door panel, but the lawsuit says that former employees warned Spirit of quality problems and were ignored. Enemies foreign and domestic: A Chinese billionaire is one of the largest landowners in America. Tianqiao Chen, who made his fortune in online gambling, was revealed this week as the buyer of 198,000 acres of Oregon timberland. Foreign ownership of U.S. land has become a hot-button political issue; the Senate voted in July to ban sizable purchases by Chinese, Russian, North Korean, or Iranian nationals. Own goal: 777 Partners loaned another $50 million to Everton, the money- and match-losing English soccer club it’s been trying to buy. The Miami-based investment firm had said the deal would close by the end of last year, but growing questions over its finances have held up the purchase. Read Semafor’s 777 coverage here. |
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