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Can one of America's loudest activist investors build the next Berkshire Hathaway?
That's certainly Bill Ackman's ambition with the fund Pershing Square USA, Ltd. [NYSE:PSUS], which launched on the New York Stock Exchange on April 29.
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Technically, this is a "closed-end fund" that offers exposure to Pershing's storied portfolio. But The Wall Street Journal reports that Ackman doesn't like using that label and instead calls PSUS "an investment management company in the body of a closed-end fund (1).”
To differentiate his product, Ackman promises to make his investment interactive. As he told CNBC (2), "We're going to have investor days. We're going to have an annual meeting, Berkshire Hathaway style, where people come and they ask questions."
But even with these unique features — plus a deal that gifted investors one share of his firm, Pershing Square, Inc. (PS) for every five shares of PSUS — retail investors seem to have cold feet.
On its first day of trading, PSUS dropped 18% from its initial price of $50 per share to a closing price of $40.93 (3).
Reports also show the total raised for PSUS and PS was at the bottom of Wall Street's expectations. As CNBC reports, Ackman raised $5 billion from institutional investors, but analysts put the high-end estimate at $10 billion (4). Keep in mind that Ackman tried to bring a similar deal to Wall Street in 2024 with expectations closer to $25 billion.
Even though $5 billion was comparatively "low," it still makes PSUS one of the 10 largest IPOs over the past 10 years, per the WSJ.
And Ackman isn't flustered by all the selling pressure. The next day, he posted on X that he scooped up 500,000 shares of PSUS and 800,000 shares of PS (5), claiming that "PSUS trades at a large discount to its $49 cash per share."
According to the WSJ, Ackman is confident that "it's going to be a very good long-term ride" for his new shareholders.
Historically speaking, it's more likely an IPO day will feel like a fireworks spectacular than a dumpster fire.
In fact, data from the University of Florida's Jay R. Ritter suggests the mean return is almost the exact opposite of how PSUS performed. Using data on IPOs between 1980 to 2025, Ritter noted an average first-day gain of 18.8% (6).
But just because Ackman had a tough first day doesn't doom his fund.
For instance, Axios found that the largest IPOs in 2025, including Circle and Newsmax, fell below their IPO prices one year later (7). So, a euphoric debut isn't exactly a positive omen for long-term investors. There are also plenty of other stories where companies steadily climbed back after brutal first-day selloffs.
Famously, Facebook's Meta Platforms had a very chaotic 2012 IPO with its shares slipping below the $38 offer price. Impatient early investors sold off on Zuckerberg, cutting the share price by 50% before it recovered to $38 in 2013. Despite all the volatility, those who held on to this company enjoyed roughly 18% returns over the next ten years, according to Statista's data (8).
Uber's IPO is another example. Even with its status as a ride-sharing giant, this company's shares struggled to maintain its $45 offer price in 2019 (9). By 2026, however, Uber has proven to be a winner for long-term holders, with average annual returns of about 7.5% (10).
Whatever your feelings about Bill Ackman, this first-day failure doesn't mean anything in the long game. We'll only truly know whether Pershing Square is a real deal competitor to Berkshire Hathaway as the years roll on.
Also, the structure of a closed-end fund adds complexity to this case. These funds raise capital upfront through an IPO and then trade like a stock. So, the price of PSUS shares can move above or below the value of the investments it holds (11).
In simpler terms, you're not just buying the assets at their face value like in a mutual fund. There's far more room for volatility in a closed-end fund depending on market sentiment.
Setting aside this closed-end fund deal, just know that buying into any IPO isn't a sure bet. Although there's a short-term bias toward a pop, cases like Meta and Uber show that underwhelming first days can turn into big winners.
It may be boring, but it's always safest to focus on an IPO company's financials and fundamentals before deciding whether it's a solid investment idea.
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The Wall Street Journal (1),(3); CNBC (2),(4); X (5); University of Florida (6); Axios (7); Statista (8); Uber Investor Relations (9); Yahoo Finance (10); Morgan Stanley (11).
This article originally appeared on Moneywise.com under the title: Bill Ackman’s fund IPO goes bust on day 1, drops nearly 20% — but first day flops don’t always mean long-term failures
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