The Pershing Square Holdings share price has had a relatively bad year. The stock is trading at 2,570p, which is where it started the year at and about 9.6% below the highest level this year. Similarly, the Pershing Square Tontine stock price has declined by more than 40% from its year-to-date high.
What happened? Pershing Square Holdings is an investment fund run by Bill Ackman, the well-known Wall Street activist investor. The company operates like Berkshire Hathaway, in that it owns stakes in several companies. Some of its portfolio companies are Chipotle Mexican Grill (CMG), Restaurant Brands International, Hilton Worldwide, and Dominos Pizza, among others.
Pershing Square has managed to crawl back after suffering significant losses a few years ago. It lost billions of dollars when its Valeant Pharmaceutical shares dropped. It also suffered a short squeeze when its short sale on Herbalife went south.
The fund returned almost 60% in 2020 amid the pandemic. This return was helped by a major bet that turned $27 million to more than $1 billion within a few weeks.
However, things have gone south this year. Data by the firm shows that it has returned just 9.3%. While this is a good return, it is lower than what the overall American stock market has returned, with the S&P 500 index rising by about 20%.
The Pershing Square share price has also struggled because of the company’s stake in Pershing Square Tontine Holdings. In the past few weeks, the shell company has been forced to abandon its investment in Vivendi’s Universal Music Holdings stake since it did not meet the criteria for a SPAC merger. Instead, PSH acquired a 7.1% stake in Universal this week. It expects to raise this stake to 10%. So, is the PSH share price a good investment?
Pershing Square share price analysis
Turning to the daily chart, we see that the Pershing Square share price has been a bit boring recently. It has formed a wide ascending channel that is shown in black. Also, in the past few days, it has formed a double-bottom pattern whose neckline is at 2,720p. It is also along the 25-day and 50-day moving averages.
Therefore, there is a possibility that the PSH share price will soon rebound as investors target the neckline of the double-bottom level. However, a drop below the current support will signal that bears have prevailed. This will in turn see the stock keep dropping.