The Pershing Square share price popped by more than 4% on Tuesday becoming the second-best performer in the FTSE 100 after IAG. The PSH share price is trading at 2,700p, which is about 10% above the lowest level in September.
Why PSH shares jumped
The Pershing Square shares jumped because of the latest debut of Universal Music Group shares in Amsterdam. The stock jumped above 25 euros, valuing the company at more than 45 billion euros. This debut was about 35% above its opening price. The firm was spun off by Vivendi, the media company controlled by Vincent Bollore.
Therefore, the stock rose because of the fact that Pershing Square owns about 10% of UMG. It acquired the stake recently after US regulators baulked at the company’s plan to use its SPAC funds to invest in the company. As such, the company’s ownership of UMG is now valued at more than 4.5 billion euros, which is substantially higher than what Pershing Square paid for.
Still, the rest of Bill Ackman’s portfolio is not doing well. After recording more than 50% returns in the past two straight years, data shows that the fund has returned just 7.7% this year. This means that the fund has underperformed the S&P 500, which has risen by more than 18% year-to-date.
Pershing Square share price forecast
The daily chart shows that the PSH stock price jumped sharply on Tuesday. By so doing, the stock moved above the key resistance level at 2,720p, which was the highest level on July 5th. It quickly resturned to the horizontal channel and is above the 25-day and 50-day moving averages (MA).
Therefore, while it is too early to tell, there is a possibility that the stock will keep rising as bulls target the key resistance at 2,830p. On the flip side, a drop below the key support at 2,600p will invalidate the bullish view.