So I have been thinking about it and I have to say it... This is probably going to offend some, but so be it.
So I don't want to comment on Ackman's outright VRX bet. I am not an expert at the strategy ostensibly used there. In the past, while I didn't particularly fancy Ackman's publicity heavy style (the BBG article where some breathless youngster referred to him as "the Socrates of our time" was priceless), I was relatively neutral. However, this options trade, the more I think about it, is so absolutely and utterly amateurish and misguided, it beggars belief. Now I am pretty sure that Bill Ackman's is not an amateur, so there's something else, much more sinister here.
I referred to the PNL path dependency issue previously. That's precisely what's happening with Ackman's now (and also happened to him at Gotham). The way prudent investors deal with this is to stress test their portfolios by imagining a very adverse outcome that occurs somewhere on the way to glory. If they're not comfortable with what such a scenario does to the odds of them reaching the other pylon of the bridge, they do smth about it (e.g. reduce leverage, diversify, hedge, etc etc). Obviously, any such actions would reduce the trade's upside, but when it's a matter of an existential threat, such a sacrifice is justified. Now this options trade makes it relatively clear to me that Ackman is not just greedy (which is perfectly fine), but that he also couldn't imagine a possibility that he could be wrong. That sort of hubris, in my mind, is a fatal flaw for an investor. No matter how the whole VRX saga ends, I would never trust Bill Ackman with a penny of my money. In my personal judgement, he's a terrible investor.
Please note that these are just my subjective and poorly informed musings. I am happy if people disagree with me.
