When markets were still apprehensive about the early warnings of COVID-19, billionaire investor Bill Ackman was bracing for impact.

The World Health Organization officially declared the pandemic on March 11, 2020 (1), but Ackman was already bunking down with his investments. His main focus was protecting his father, Larry, who was at risk of multiple comorbidities, including lung cancer. But after realizing the pandemic was going to have a big impact on the economy, Ackman focused on protecting his investments as well.

Over a 10-day period, Ackman did just that by purchasing credit default swaps on corporate bonds, which insured the positions of his firm — Pershing Square Capital Management — if the market began to move in a negative direction (2), according to StreetFins. A credit default swap is essentially an agreement where the seller pays the buyer if a specific debt defaults.

In total, Ackman’s purchase had about $74 billion notional value in insurance, which represents the total amount of risk being covered, rather than the actual cash amount.

“There was this massive storm coming. We could see the storm, but everyone else was playing on a beach,” Ackman told Robinhood CEO Vlad Tenev during a recent interview for Pershing Square’s YouTube channel (3).

“It cost us only $27 million. Ten days later, it became worth $2.6 billion. We took that money in March 2020, with the market down 30%, [and] we bought stocks.”

Did Ackman help fuel market panic?

As much as this money move paid off for him, Ackman’s March 18, 2020 post on X (4) — as well as his subsequent “hell is coming” interview with CNBC (5) — received plenty of criticism. Having become entrenched in the pandemic, Ackman had essentially bet on the U.S. economy undergoing a massive short-term shock due to the lockdown, and some believe his messaging induced further panic.