Bill Ackman runs a private equity fund named Pershing Square. They are an activist hedge fund, which means they take positions in companies, then advocate for things that company should do, by putting pressure on companies in public. He dropped one of the hardest singles of the year so far, on Bloomberg.
It's called IPO Dreams. Let's listen together:
Ackman on the Beat (and the board)
Now, let's break the lyrics down together:
Can we talk about one of those big ideas? In Universal Music Group. You come forward with an offer to buy this company and a lot of people scratch their heads. What is the game plan?
Actually, the game plan there is absolutely we need the support of Bolloré Group. But what we're proposing is very much aligned with what they're interested in.
"we need the support of Bolloré Group"
Vincent Bolloré's family controls ~18% of UMG. You can't restructure without them. Ackman isn't making a hostile move — he needs the biggest shareholder in the room to say yes. This is how deals actually work at this level.
Universal remains the dominant company in the recorded music industry. It's done a very good job with that. But they've not sort of graduated from being operating like a private company into being a public company.
"they've not graduated from operating like a private company into being a public company"
UMG went public in September 2021 on Euronext Amsterdam. But public company behavior — transparency, IR discipline, clear capital allocation — takes cultural change. UMG still acts like a Bolloré-controlled private asset. Investors aren't pleased (Bill is 'investors').
And they've lost the confidence of shareholders in the analyst community. The business value has grown. And the multiple that people assign to the earnings of the company has declined.
"the business value has grown, and the multiple has declined"
This is the trap. Revenue is up. Streaming is growing. But the market is pricing in: How fast can streaming still grow? Will pricing power hold against Spotify, Apple, TikTok, YouTube? When investors can't answer those questions confidently, they apply a discount.
The company first day of trading was 25 euros. September of '21. Here we are almost five years later. The stock is 19 euros, 18 euros. So that's not a good performance. The company really needs a reset.
"The stock is 19 euros, 18 euros...that's not a good performance"
IPO was €25 in September 2021. Five years later: €18–19. In the same window, the S&P 500 is up ~60%. The business didn't fail — the story did. Markets punish conglomerate complexity, unclear accountability, lack of catalysts.
It's also listed really in the wrong exchange. It's really a U.S. company. So our transaction moves the company from Amsterdam to a U.S. listing. That alone is meaningfully value creating.
"it's listed in the wrong exchange"
UMG is a global company with most of its revenue tied to US-dominated streaming platforms and US artists. Being listed in Amsterdam means European institutional investors set the price — and they think about this differently than US growth investors do.
The company has unmonetized assets on the balance sheet. Their stake in Spotify. We think they should sell the balance. But our transaction effectively enables a cancellation of about 17 percent of the outstanding shares, a migration of the company here, a new board of directors led by Mike Ovitz.
"unmonetized assets...their stake in Spotify"
UMG holds Spotify equity that isn't generating returns as a holding — it's just sitting there. Ackman's point: monetize it. UMG later announced selling half. He thinks they should sell all of it.
"a cancellation of about 17 percent of the outstanding shares"
A buyback at this scale signals: management believes the stock is undervalued. It concentrates ownership and improves per-share metrics. Combined with the Spotify sale, this is a balance sheet reset in one move.
"a new board of directors led by Mike Ovitz"
Ovitz co-founded CAA and was briefly president of Disney. Ackman putting him at the head of the board is a credibility play — someone who understands creative industry dynamics AND investor expectations.
And you're hopeful that they will be receptive to this? I mean, the company has to do something. This is a very good solution to the various issues that confront the company.
"the company has to do something"
This is the core argument. Not: our offer is good. But: the status quo is untenable. When you frame it that way, you're not selling a deal — you're naming a problem the other side already knows they have.
I mean, yes. Look, the exchanges are natural monopolies. If you're not listed in a market which has the most demand, your cost of capital is going to be higher than it should be. Europe has too many exchanges. If I were in charge of Europe, I would consolidate the London Stock Exchange, Euronext, kind of bring the various exchanges. But there's sort of nationalism, I think, prevents that.
"Europe has too many exchanges...nationalism prevents that"
Exchanges are natural monopolies — liquidity concentrates. Europe has fragmented its capital markets across national lines for political reasons, not financial ones. European listings structurally trade at a discount to US ones. Ackman says the quiet part loud.
Why this matters
The market is asking:
- How fast can streaming still grow?
- Will pricing power hold against Spotify, Apple, TikTok, YouTube, etc.?
- Is publishing/recorded revenue “bond-like” (stable, low-growth) or “tech-like” (compounding, high-multiple)?
Music catalogs are not just IP. They're infrastructure.
Bill Ackman is betting that Universal Music Group — the largest catalog on the planet — is mispriced. Not because the music got worse. Because the story told to markets hasn't caught up to the asset. He made those comments for a specific audience, because they are listening to him. If Universal goes, other labels will have to explain (or decide) who they want to be. Artists will too.