Henry Winkler once said, “Assumptions are the termites of relationships.”1 In 2011, Bill Ackman assumed it was okay to talk to The New York Times about David Einhorn’s business and, like a homeowner forced to move out for three days while a pest control sprays the place, he’s been forced to pay. Big time.
Einhorn and Ackman were once good friends. They met on a subway platform in 1998 after they both had attended an industry luncheon. In March 2010, when the two appeared together on CNBC, Einhorn said of Ackman, “Bill’s a phenomenal investor. . . . His returns are absolutely extraordinary. It shows there are a lot of different ways to go about things. He’s a fabulous investor.”
Without missing a beat, Ackman replied, “David is my marketing adviser.”
The relationship soured, however, around the time the Indago Girls were making their Herbalife pitch to both men. “David and I had what you might call a falling-out,” Ackman admits. It happened in June 2011, when Ackman was quoted in The New York Times revealing that Einhorn, a Milwaukee-area native, had wanted to buy the Milwaukee Brewers in 2004 but lost out to Mark Attanasio, another financial heavyweight. At that moment, Einhorn was trying to buy a piece of the New York Mets, and, Ackman says, Einhorn feared if the Mets knew of his previous interest in the Brewers they would conclude he was just another rich hedge-fund guy looking to buy a new toy, as opposed to being a serious Mets fan. Ackman says he was just trying to help show that his friend had a lifelong interest in baseball. There was some back-and-forth on e-mail between the two men, and that was that. “David and I are friendly, but it’s like we were boyfriend and boyfriend, and then one day we were just friends, and now we’re just friendly,” Ackman says. “I have enormous respect for him. But as a result of that, I stopped calling him and he stopped calling me, so that’s why I didn’t talk to him” about Herbalife.
The Big Short War [Vanity Fair]
1. To get inspired for this post I spent the day reading quotes about relationships on the internet. My favorite was, “When someone loves you, the way they say your name is different. You know that your name is safe in their mouth.”2
2. Matt’s going to work up an algorithm for tomorrow but so far we’ve figured out that the basic formula is: stupid quote + “in their/your mouth”.