Ackman Won’t Invest in HP, Sees Too Much ‘Brain Damage’

Pershing Square Capital Management's Bill Ackman
Bill Ackman, chief executive officer of Pershing Square Capital Management. Photographer: Daniel Acker/Bloomberg

Oct. 5 (Bloomberg) -- Bill Ackman, founder of activist hedge-fund manager Pershing Square Capital Management LP, said he would avoid investing in Hewlett-Packard Co. because the cost of evaluating the company would outweigh the benefits.

Ackman said he received five or six calls from investors in HP, the world’s biggest personal computer maker, in recent months “begging us to take a stake,” according to an interview conducted on Bloomberg TV’s “Inside Track” with Erik Schatzker.

“It looks cheap, but the future of the PC is a very, very difficult business to handicap,” said Ackman, 45. “It’s a big, complicated mess.” Paul de Lara, a spokesman for HP in London, declined to comment.

Ackman invests in companies he deems undervalued and then urges changes to increase shareholder returns. In the past year, he has bought stakes greater than 10 percent in Fortune Brands Inc., the maker of Jim Beam bourbon that changed its name to Beam Inc. after a spinoff, and J.C. Penney Co., the third-largest department store chain in the U.S.

HP Chief Executive Officer Meg Whitman, who succeeded Leo Apotheker last month, said yesterday the company will decide whether to spin off its personal-computer division by the end of the month.

Speaking to Schatzker, Ackman said the announcement of the spinoff had perhaps “irreparably damaged the brand.”

“Before I make an investment in something that requires ’brain damage,’ or a lot of work and energy, I figure out how much money I can make,” he said, referring to Palo Alto, California-based Hewlett-Packard. “And the higher the brain damage, the higher the profit has to be to justify it.”

The shares of Hewlett-Packard rose 82 cents, or 3.7 percent, to $23.02 yesterday in New York Stock Exchange composite trading. The stock has fallen 45 percent this year.

To contact the reporters on this story: Erik Schatzker in New York at; Katie Linsell in London at

To contact the editor responsible for this story: Kenneth Wong at