Billionaire Bill Ackman just bought $2.3 billion worth of this incredible growth stock, which could make it his hedge fund’s biggest bet
Bill Ackman is one of the most watched investment managers in the world. He is in charge of Pershing Square Capital, a hedge fund aimed at investing in Ackman’s best ideas. His highly concentrated portfolio is full of great companies, but he may have just made a stock the largest stake in Pershing Square.
Starting in January, Ackerman and his team have strategically acquired 300.3 million shares Uber Technology (NYSE: Uber). As of this writing, these stocks are worth more than $2.3 billion as news on the Ackman position sends higher shares. Uber is now likely to be Pershing Square’s largest equity holding, according to a position disclosed in its latest 13-F application filed with the Securities and Exchange Commission (Securities and Exchange Commission). .
Ackman praised Uber CEO Dara Khosrowshahi in a post X revealing his location. Khosrowshahi, he said, “does a great job in transforming the company into a profitable and cash-generated growth machine.”
Indeed, since becoming Uber CEO in 2017, the company has gone from burning $1.5 billion in cash a year to generating more than $7 billion in operating cash flow in 2024. ) rose from negative $2.6 billion in 2017 to $6.5 billion in 2024. Since 2023, it has also been based on accepted accounting principles (GAAP).
Ackman believes that Uber has a lot of growth. “It is worth noting that it can still be purchased at a high discount on its intrinsic value,” he wrote.
Even after the stock price rose after Ackman’s announcement, Uber stock has a corporate value of 0.9 times the total 2024 bookings. Management expects total bookings to grow by 18% in the first quarter of 2025. Corporate value is a more traditional valuation measure for Ebitda, with shares trading less than 18 times analysts’ 2025 expectations. Management expects EBITDA to grow by 30% to 37% in the first quarter.
Uber’s management has done a great job of turning the company to profitability and pushing forward. Inventory valuations also look attractive. Importantly, it has a great competitive advantage and can protect it from future competition to enter the market.
One thing Khosrowshahi did at Uber is to transform the company from a company focused on ride sharing to a company that matches the driver, moving anything from point A to B. The company also folded Uber Uber Eats into a major Uber app and created several strategic acquisitions in delivery and logistics.
