Pershing Square Capital's CEO Bill Ackman Takes On Herbalife. Pershing Square Capital Management
has published a web site
(initial disclaimer requires agreement) that provides the public with information about the MLM company Herbalife
, including a trove of original source materials that substantiate the firm's accusation that Herbalife, a publicly traded company
(ticker symbol HLF
) with a market capitalization of over 8 billion dollars
, operates as a illegal "pyramid scheme."
Pershing Square CEO and "activist investor" Bill Ackman's
investigation is available as a (10mb) PDF of a massive PowerPoint presentation
, or as a webcast
presentation. (Webcast requires registration; PDF, amusingly titled "Who wants to be a millionaire?", is freely downloadable and contains over 300 slides).
Pershing Square's "Facts About Herbalife"
"Herbalife distributor presentations, recruiting scripts and presentations, distributor lifestyle videos, nutrition club photos, third-party investigative reports, Herbalife Today
magazines, court hearing and deposition transcripts, archival video and other materials on the history of the company, lead generation systems, SEC correspondence, and other data that will assist the public in understanding the facts about Herbalife."
From the Forbes article
(same as primary FPP link above) by Helaine Olen
"[Ackman, CEO of the Pershing Square investment firm] claims his ultimate goal is not to profit from his short position – he’s announced he’s giving all money he earns from it to charity – but that he would like the federal government to shut Herbalife’s 32-year-old nutritional supplement business down. 'A lot of people have been harmed here,' he said in an interview with Bloomberg last week. Needless to say, Herbalife is crying foul, and Herbalife Chief Executive Officer Michael Johnson says he will respond to what he describes as 'blatant market manipulation' by Ackman in an day to be held in early January, 2013."
This follows an May 1, 2012 episode where David Einhorn,
a prominent hedge fund manager for Greenlight Capital, raised similar questions
in a conference call
with Herbalife investors.
For further commentary on Herbalife, see "Deja Vu's" Dec. 23 article on SeekingAlpha.com: "But Mr. Ackman, Herbalife is a Sustainable Pyramid Scheme"
, which points out:
"[Herbalife's] 'innovation' of blaming the victim for not getting paid back allows Herbalife to import a steady supply of new victims each year, suck them dry and discard them. Much like a ravenous herd that grazes a range down to the bare ground and moves on to the next grassland, Herbalife sustains itself by moving from one demographic group to the next - African Americans, Koreans, Chinese, stay at home moms, college students, etc. Herbalife sucks each group dry over a period of years and then moves on to the next. This explains how Herbalife has stayed in business for 32 years in the US. Internationally, it's much simpler, Herbalife simply moves on from one set of countries to the next."
an anonymous author for Seeking Alpha who claims to be a CEO of a medical device company, also discloses a short position in Herbalife, FWIW.)