Bill Ackman says he hasn't talked to Elon Musk about X investment for Pershing 'SPARC'

Key Points
  • Billionaire investor Bill Ackman said that while he likes both Twitter and Elon Musk, Pershing Square's SPAC-like structure had not yet had a formal conversation with the Tesla founder about a deal.
  • Ackman suggested that if Pershing Square were to invest in X, formerly known as Twitter, it could go toward lowering X's crushing debt load.
  • Musk borrowed some $13 billion to help close his acquisition of Twitter, but the asset is likely worth far less than the $44 billion he paid for it.
Bill Ackman on new 'SPARC' structure, potential deal with Elon Musk's X
Bill Ackman on new 'SPARC' structure, potential deal with Elon Musk's X

Activist investor Bill Ackman on Monday told CNBC he had not spoken with Elon Musk about a deal involving X, formerly known as Twitter, but that he likes the business and Musk and suggested a deal with X would be welcome if Musk wanted it.

"I have a lot of respect for Musk, I think Twitter is a really important platform, I think he's made tremendous improvements to the platform, and I think it's a very difficult-to-disrupt kind of asset," Ackman told CNBC's Andrew Ross Sorkin in an interview.

The billionaire CEO of Pershing Square Holdings was discussing his new carve-out vehicle, which he called a SPARC, or special purpose acquisition rights company. The product is similar to a SPAC, but Ackman said Pershing's structure would only invest in companies it views as long-term investments. SPACs drew tremendous investor and regulatory scrutiny, in part because they favored insiders and allowed them to make huge profits off the backs of nonfavored investors.

Elon Musk, left, and Bill Ackman.
Reuters (L) | CNBC (R)

Ackman specifically highlighted X's crushing debt load — around $13 billion owed to a consortium of banks — as a sensible reason for Musk to agree to the deal and take a part of X public again. The Financial Times reported last month that banks are unhappy and looking for ways to get out.

Ackman made waves in a Sunday interview with The Wall Street Journal, where he said he would "absolutely" invest in X through his new SPARC structure. If part of X were to debut on the market, it would likely be at a valuation far below the $44 billion Musk paid for it. Revenues have reportedly fallen by double-digit percentages, according to Musk, and despite new X CEO Linda Yaccarino's reputation as an advertising maven, ad dollars have still not returned to pre-acquisition levels.

X also faces increased competition from Meta. Threads debuted with a splash but has struggled to retain users and has fallen off sharply in engagement, according to third-party data reports. Still, Meta has a hefty war chest, a deep engineering bench and existing relationships with major advertisers.