Domino’s Pizza Share Jump as Billionaire Investor Bill Ackman Reveals 6% Stake

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Bill Ackman said that his Pershing Square Capital Management hedge fund built a 6% stake in Domino’s Pizza by swapping Starbucks for it Photo Credit: wnyc.org

Edited by: TJVNews.com

Turns out that the next time the family wants to stop at Domino’s Pizza to pick up a pie, you might want to remind  them that you are indirectly helping to line the pockets of billionaire investor Bill Ackman

As was reported by CNBC, Ackman said that his Pershing Square Capital Management hedge fund built a 6% stake in Domino’s Pizza by swapping Starbucks for it. Bloomberg News reported that this means that Ackman is adding another big-name consumer company to his portfolio. Ackman said he bought into Domino’s when the shares dipped to roughly $330 and also said that his blank-check firm is nearing a separate deal to take an “iconic” brand public in the coming weeks, as was reported by Bloomberg Business News.

During the Wall Street Journal’s Future of Everything Festival, Ackman said:  “We sold Starbucks. It got to a price that it was hard to earn the excess return we like to earn … The stock just recovered too quickly,” as was reported by CNBC.

Pershing Square owned more than $1 billion worth of Starbucks at the end of last year. After hitting a pandemic low in March 2020, Starbucks’ shares came back rapidly, finishing the year up more than 20%.

Ackman added: “We didn’t get as much as we would like but we own a little under 6%.” Following Ackman’s remarks, CNBC reported that shares of Domino’s Pizza jumped more than 3% to its high of the day around $435 apiece

“We welcome investment in Domino’s, and appreciate the confidence and support expressed for our company and our brand,” the company said in an emailed statement.

As dine-in restrictions start to ease across the country, delivery-heavy chains like pizzerias had largely been expected to see their strong sales start to taper off. But that hasn’t happened yet. Domino’s revenue of $983.7 million last quarter was up 13% from a year prior, even when lapping last year’s early pandemic bump, as was reported by Bloomberg News

“Ultimately, our view was actually a lot of negative during the Covid environment. There weren’t football games where you invited over 12 of your buddies and ordered Domino’s. There weren’t college campuses in session,” Ackman said. “Our view is there will be continued growth in that business.”

Bloomberg News reported that Domino’s has become the latest restaurant chain that Pershing Square has invested in, following stakes in such names as Chipotle Mexican Grill Inc., McDonald’s Corp. and Burger King-owner Restaurant Brands International Inc.

The hedge fund manager has been betting big on the restaurant, retail and hotel industries coming back, according to the CNBC report. His top holdings at the end of 2020 included Lowe’s and Hilton.

Pershing Square owned more than $1 billion worth of Starbucks at the end of last year. After hitting a pandemic low in March 2020, Starbucks’ shares came back rapidly, finishing the year up more than 20%.