Ackman revealed Pershing Square sold Starbucks after the coffee chain's swift rebound from the pandemic. At the same time, he picked up Domino's shares following a pullback.
"We sold Starbucks. It got to a price that it was hard to earn the excess return we like to earn ... The stock just recovered too quickly," Ackman said during The Wall Street Journal's Future of Everything Festival.
The investor said that for a brief moment, Domino's shares "dropped dramatically in price for reasons we didn't understand and we were able to swap Starbucks for Domino's Pizza." He said he started buying at around $330 a share.
"We didn't get as much as we would like but we own a little under 6%," Ackman added.
Shares of Domino's Pizza jumped more than 3% to its high of the day around $435 apiece following Ackman's remarks. Starbucks shares fell 2.3% on Wednesday.
Pershing Square owned more than $1 billion worth of Starbucks at the end of last year. After hitting a pandemic low in March 2020, Starbucks' shares came back rapidly, finishing the year up more than 20%.
Ackman said he's bullish on Domino's pioneering moves in technology and delivery. The stock is up more than 13% in 2021.
"Domino's is a pure franchising company and interestingly they were the first to invest in technology and delivery," he said. "They own their delivery infrastructure and they don't need to rely on the DoorDashes of the world."
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