Billionaire Bill Ackman takes slice of Domino's Pizza
Hedge fund manager builds nearly 6% stake
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Billionaire hedge fund manager Bill Ackman has amassed a nearly 6% slice in Domino’s Pizza Inc. while exiting his position in Starbucks Corp.
Shares of Domino’s Pizza rose on the news while Starbucks shares fell in sharply down market.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DPZ | DOMINO'S PIZZA INC. | 471.28 | -2.27 | -0.48% |
| SBUX | STARBUCKS CORP. | 88.18 | +0.57 | +0.65% |
Ackman said he has admired Domino’s for years, but was never able to pull the trigger on buying shares.
"It always was never cheap enough, and then for about five minutes it got cheap," Ackman told The Wall Street Journal’s Future of Everything Festival.
Ackman's Pershing Square Holdings began buying Domino’s shares in March 2020 near $330. The stock has since climbed 28% through Tuesday – to more than $422.
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Ackman said the pizza chain has a "completive engine" in owning its own delivery infrastructure. By not having to rely on services like DoorDash and Uber Eats, which take a large percentage of the proceeds, Domino’s can afford to deliver pizzas for $7.99.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| UBER | UBER TECHNOLOGIES INC. | 68.98 | -0.22 | -0.32% |
| DASH | DOORDASH INC. | 127.27 | +0.09 | +0.07% |
Domino’s is the latest investment by Ackman in the restaurant industry, which has served his Pershing Square Holdings well. Ackman currently has positions in other fast food restaurants including Burger King parent company Restaurant Brands International Inc. and Chipotle Mexican Grill Inc.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| QSR | RESTAURANT BRANDS INTERNATIONAL INC. | 73.30 | +1.88 | +2.63% |
| CMG | CHIPOTLE MEXICAN GRILL INC. | 2,884.25 | +15.14 | +0.53% |
While Ackman entered a position in Domino’s, he took profits in his 1% stake in Starbucks as shares quickly rebounded from their COVID-19 induced selloff.
Ackman reestablished a position in Starbucks in April 2020, two months after booking a 73% return on his 19-month-long investment in the coffee chain.
Starbucks CEO Kevin Johnson has "done an amazing job," Ackman said. "I think investors will do well in Starbucks."
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Domino’s Pizza shares were up 10% this year through Tuesday while Starbucks shares were up 6.14%.