That first bet
The billionaire investor anticipated governments would be forced to shut large swaths of their economies in order to curb the spread of coronavirus, leaving many indebted companies exposed. When that swiftly proved accurate, the value of the insurance ballooned and Pershing Square exited the trade in mid-March, pocketing $2.6bn in profits after having only paid $27m in premiums.
Mr Ackman chose to plough the winnings back into equities, adding to several of Pershing Square’s existing stakes and acquiring new positions that set the company up to profit from a stock market rally.
The new bet
Pershing Square placed its new bet against corporate credit on the day that Pfizer and BioNTech released positive trial data on their Covid-19 vaccine, causing markets to take a sudden bullish turn.