Key Takeaways
- • Bill Ackman reversed his cryptocurrency endorsement within one week after issuing a 19-tweet thread on November 20 praising Helium and Dimo as projects demonstrating intrinsic token value, amid renewed sector scrutiny following FTX's bankruptcy filing.
- • Ackman's Helium endorsement contained demonstrably false claims: Lime has never used Helium's network despite Ackman citing the e-scooter company as a key user of Helium's "global Wi-Fi network" of 974,000 hotspots.
- • Forbes investigation revealed Helium generated only $92,000 in revenue between June 2021 and August 2022 from its primary use case (wireless data), while executives hoarded newly minted HNT tokens—contradicting Ackman's assertion of intrinsic value building.
- • HNT token has collapsed 95% from its November 2021 peak of $52.70, trading at $2.46 as of November 28, 2022, underscoring the speculative and troubled nature of the blockchain project Ackman initially promoted.
- • The walk-back reflects broader crypto sector credibility challenges following high-profile collapses and demonstrates due diligence failures among prominent institutional investors evaluating Web3 projects.
Summary
Billionaire hedge fund manager Bill Ackman publicly reversed his cryptocurrency endorsement less than one week after issuing a bullish 19-tweet thread on November 20, 2022. Ackman's initial thread, published amid heightened scrutiny of the crypto sector following Sam Bankman-Fried's FTX bankruptcy filing, championed cryptocurrency's "potential for beneficent societal impact" and specifically highlighted Helium and Dimo as exemplary blockchain projects demonstrating how tokens could "build intrinsic value over time."
Ackman's Helium endorsement rested on a fundamental factual error. He described Helium as a "global Wi-Fi network" actively used by e-scooter company Lime, citing the project's network of 974,000 hotspots as evidence of value creation. However, Lime has never used Helium's network—a fact confirmed to Forbes as part of a September 2022 investigation and initially reported by The Verge and Mashable. This misstatement undermined the core rationale for Ackman's investment thesis in the project.
Beyond the false usage claim, Forbes' investigation exposed deeper problems with Helium's fundamentals. The project generated merely $92,000 in revenue between June 2021 and August 2022 from its primary use case—wireless data services—raising serious questions about viable business operations. Additionally, investigation findings indicated that Helium executives hoarded the majority of newly minted HNT tokens, concentrating supply among insiders rather than distributing rewards broadly across network participants. Helium co-founder and CEO Amir Haleem responded to Forbes' reporting by stating that the financial figures "feel unreasonable to me or egregious in any way," defending the project's performance.
The token's market performance underscores the speculative nature and deteriorating prospects of the project Ackman endorsed. HNT has declined over 95% from its November 2021 peak of $52.70, trading at just $2.46 on November 28, 2022. Ackman's rapid walk-back of his initial endorsement reflects both the reputational risks of insufficient due diligence in crypto investments and the sector-wide credibility challenges intensified by prominent collapses in late 2022.
Ackman's Helium endorsement rested on a fundamental factual error. He described Helium as a "global Wi-Fi network" actively used by e-scooter company Lime, citing the project's network of 974,000 hotspots as evidence of value creation. However, Lime has never used Helium's network—a fact confirmed to Forbes as part of a September 2022 investigation and initially reported by The Verge and Mashable. This misstatement undermined the core rationale for Ackman's investment thesis in the project.
Beyond the false usage claim, Forbes' investigation exposed deeper problems with Helium's fundamentals. The project generated merely $92,000 in revenue between June 2021 and August 2022 from its primary use case—wireless data services—raising serious questions about viable business operations. Additionally, investigation findings indicated that Helium executives hoarded the majority of newly minted HNT tokens, concentrating supply among insiders rather than distributing rewards broadly across network participants. Helium co-founder and CEO Amir Haleem responded to Forbes' reporting by stating that the financial figures "feel unreasonable to me or egregious in any way," defending the project's performance.
The token's market performance underscores the speculative nature and deteriorating prospects of the project Ackman endorsed. HNT has declined over 95% from its November 2021 peak of $52.70, trading at just $2.46 on November 28, 2022. Ackman's rapid walk-back of his initial endorsement reflects both the reputational risks of insufficient due diligence in crypto investments and the sector-wide credibility challenges intensified by prominent collapses in late 2022.
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