Bill Ackman Sold Starbucks After Buying Domino's Pizza

(Photo by WSJ)

[Asia Economy Reporter Yujin Cho] Bill Ackman, an American billionaire investor and a giant in the hedge fund industry, reportedly holds a 6% stake in Domino's Pizza, according to the Wall Street Journal (WSJ) and others on the 12th (local time).

At a WSJ-hosted online conference that day, Ackman revealed that Pershing Square, the hedge fund he founded, sold its Starbucks shares and purchased Domino's Pizza shares. The purchase price for Domino's Pizza was $330 per share, with the market value of the 6% stake reaching approximately $1 billion.

He stated, "Domino's Pizza's stock price plummeted for reasons I couldn't understand, and I was able to exchange Starbucks shares for Domino's Pizza shares."

Domino's Pizza reported first-quarter sales of $983.7 million, marking a 13% increase compared to the same period last year during the early stages of the COVID-19 outbreak, continuing its strong performance.

The WSJ noted that although the easing of operational restrictions in the dining industry due to the expansion of COVID-19 vaccinations was expected to reduce sales for delivery franchises like Domino's Pizza, contrary to expectations, it has maintained steady growth.

Ackman said, "During the COVID-19 period, food businesses focused on delivery and takeout prospered," adding, "In particular, Domino's Pizza has its own delivery infrastructure, which is a significant competitive advantage because it does not rely on external delivery companies like DoorDash or Uber."

On the day, Domino's Pizza, listed on the NASDAQ in the United States, closed at $425.44, up 0.73%.

Regarding Starbucks stock, Ackman said, "We sold because the price reached a level where we could no longer see excess profits. Starbucks stock recovered too quickly." Starbucks stock fell 2.93% that day, closing at $109.79.