Ackman Leading Stock-Picking Contest by Shorting Caesars Investor Icahn

Pershing Square Capital Management co-founder and CEO Bill Ackman is at the forefront of a well-known stock-picking competition, partly due to a wager against Caesars Entertainment (NASDAQ: CZR) investor Carl Icahn.

In what seems to be a now-removed post on X from last Friday, Ackman disclosed that his short selection for the Robin Hood Foundation’s stock-picking competition is Icahn Enterprises (NASDAQ: IEP), the publicly traded holding entity for the financier’s investments. In the social media update, Ackman pointed out that his bet against Icahn Enterprises is exclusively for the purposes of the Robin Hood contest and that Pershing Square does not engage in short-selling stocks.

"The Robin Hood Foundation, a charitable organization committed to alleviating poverty in New York City, has enlisted the boldest names in finance in a stock-picking contest. Contestants have donated $10,000 and made two stock picks—a long and a short—per entry,” according to Bloomberg.

The contest began on October 28 and continues until April. As of December 11, Ackman’s returns in the contest stood at 112. 5%, significantly surpassing the second-place contestant whose selections have increased by 63. 1% since the event commenced.

Ackman Not Directly Betting Against Caesars

In May, Icahn disclosed that he had acquired a new position in Caesars stock but pointed out he wasn’t advocating for any type of activism towards the casino giant. An August regulatory filing showed that Icahn’s stake in Caesars amounted to just over 2. 44 million shares.

In 2019, Icahn Enterprises established a roughly 10% stake in the “old Caesars,” positioning him to later orchestrate the $17. 3 billion acquisition by Eldorado Resorts — the deal that established “new Caesars. ” The management at Eldorado, including CEO Tom Reeg, currently oversees operations at Caesars. Icahn is said to have considerable respect for Caesars’ present management team, including Reeg, which may have influenced his decision to invest in the company again.

Ackman’s wager against Icahn Enterprises for the Robin Hood contest is not a critique of Caesars, although the gaming stock’s 5. 83% decline over the past month has contributed to a nearly 19% decrease in shares of Icahn Enterprises during that period, providing the Pershing Square leader with a solid advantage in the contest.

The dispute between Ackman and Icahn dates back to at least 2013 and revolves around nutritional supplement company Herbalife. The previous year, Ackman took a substantial short position in that stock. In 2013, Icahn began acquiring a significant long position in the stock, which drove the share price up and adversely impacted Ackman’s short position.

The two exchanged insults during a CNBC interview that year, with Icahn referring to his adversary as a “crybaby. ” The two billionaires reconciled in 2014.

Other Gaming Investors Participating in Contest

Only one participant in the Robin Hood contest selected a gaming equity as their long position. That’s Eminence Capital’s Michael Fitzsimmons, who chose Melco Resorts (NASDAQ: MLCO). Shares of the Macau casino operator have risen by almost 10% over the past month.

It remains uncertain if any of the participants have direct short positions against gaming equities for the contest, but several selected consumer discretionary stocks as their bearish bets, which is the sector that encompasses gaming stocks.

David Einhorn, whose Greenlight Capital holds shares of Penn Entertainment (NASDAQ: PENN), and Ricky Sandler, whose Eminence Capital is involved as an activist investor in Entain Plc (OTC: GMVHF), are also taking part in the competition. Neither selected gaming stocks as their long positions, and their short bets are rooted in the financial services (Einhorn) and healthcare (Sandler) sectors.