Whether or not Ackman is right, his method is what's questionable. Let alone what seems like insanity to me: he's making a very public short bet against a company. He's _borrowing_ shares of stock to prove the management is wrong and publicly announcing that fact. So everybody can pile into the short squeeze, irrespective of the facts or morality of the situation. This is one reason why the quote "The market can stay irrational longer than you can stay solvent.” applies. The market is irrational because it's in the participants' short term interest for it to be irrational.

> Conventional activists like Carl Icahn and Nelson Peltz buy shares and then “try to fix the company,” observes one hedge fund investor. Ackman, by contrast, is trying to annihilate a company. “I’ve never heard of short-selling activism in my life,” this investor says. “Are we comfortable that a private individual named Bill can try to put somebody out of business?”

Shorting a company as a method of activism just seems like a terrible strategy on the face of it. A short is a really risky strategy for investing, for activism it just seems even worse. If you want to change a company using its stock, the effective way is to be rich enough to buy enough stock to influence the board.

Seems like it could be the other way around- legal/social action against a company as a strategy for shorting.

Of course, they (the allegedly misled class) deserved to at least get a trial and a ruling, which at that scale require money and press coverage. But Ackman turned it into spectacle, which probably is what motivated Carl Icahn to btchslap his short.