Will Bill Ackman's Borders Trade Work Out? (BGP, BKS)

Bill Ackman, the portfolio manager of Pershing Square Capital, has been lauded for some of his investments, most notably in General Growth Properties GGP and Target TGT. One trade that isn't working out so well for the silver-haired investors is Borders Group BGP, the book seller. Borders is currently trying to refinance its debt, as it tries to stave off bankruptcy. Ackman has tried to tie up Borders and Barnes & Noble BKS by having Borders buy Banes & Noble for $17 per share in cash, but so far, that hasn't worked out. Ackman entered the position quite a while ago, and some have speculated that he could lose 100% of the value of his investment, if Borders eventually files Chapter 11, as many believe it will. Ackman had a wonderful 2010, earnings almost 30% net of fees, thanks in large part to his returns in Fortune Brands FO and General Growth. 2011 may not be nearly as kind, as Ackman owns 37% of Borders. If the company giles bankruptcy, it's going to be very hard for it to repeat 2010's returns. Disclosure: long GGP