Bill Ackman

  • 05 Aug 2013 at 12:18 PM

Everyone Thinks Everyone Else Is Manipulating Herbalife

There are puzzling reports that Bill Ackman has been complaining to the SEC about George Soros’s investment in Herbalife, claiming that “Soros’ firm broke insider-trading rules by tipping hedge funds about its purchases” at “idea meetings.” You might remember Bill Ackman as the man who called a big press conference to tell everyone that he was short Herbalife and they should join him. There was PowerPoint! It was like eight hours long. I suppose some people traded on it though I also suppose they regret it.

So what’s his problem? I do not understand this at all. The allegation of insider trading is particularly weird; as far as I know no one has any obligation to keep their share ownership – or plans to buy more shares – secret. A cynic might say that the business of fundamental equity fund management consists mostly of telling people about your positions, which is why CNBC exists. It’s also why Ackman’s Herbalife drama exists; one irony is that if he had not called that press conference he probably would never have baited Carl Icahn into becoming Herbalife’s biggest proponent. Should have kept it to an idea meeting! Read more »

Bob Chapman has theories. Read more »

The “pyramid scheme” known as Herbalife has now cost Bill Ackman’s investors something like $300 million, thanks in part to its “best quarter ever.” Of course, that plaudit depends on actually believing the things said in Herbalife’s unaudited financial statements, and luckily for Bill Ackman, he does not. And has a few questions. Read more »

If you missed out on the opportunity to lose 90% on Bill Ackman’s last can’t-miss single-stock fund, you’ve got nine days to ensure you aren’t kicking yourself this time. Read more »

  • 04 Jun 2013 at 1:58 PM

Bill Ackman Has A Dream

Financial Times: You have received a lot of good press, but there has also been some criticism of some of the investment stances you have taken and also your trading techniques, specifically the short selling. In a way, your philanthropy does not seem to fit with how you live your professional life. How would you respond to that assertion? Bill Ackman: I think we’ve accomplished more for society in our for-profit activities than in our not-for-profit activities. My work with the Pershing Square Foundation is a continuum of what I do in my professional life. When the Foundation sees a problem we always ask if there is a business solution. I think most of the criticisms you have heard relate to my position on Herbalife. If I manage to close down that company I will consider it the greatest achievement of my life. [FT]

Overtime that was not for naught! Thanks to labor laws protecting LBBs, Tepper took home $2.2 billion last year. Other people who made some money in 2012: Read more »

It’s a little surprising that it took this long for someone to sue Herbalife, isn’t it? Whether or not Bill Ackman is right about Herbalife being an illegal pyramid scheme, he did take the trouble of writing like 300 pages about it, which is usually more than enough to inspire some intrepid class action lawyer to cut and paste the most damaging claims into a complaint and see where it goes. Perhaps they were stymied by converting from PowerPoint. Anyway here you go:

California resident Dana Bostick is suing Herbalife under racketeering and corruption laws, accusing the company of being an “inherently fraudulent pyramid scheme.” …

While Herbalife has settled suits brought by former distributors in the past, Bostick is the first to go to court since Herbalife became a battleground of hedge fund titans. Ackman has faced off against Dan Loeb and Carl Icahn, who owns a 15 percent stake in Herbalife. … The suit, which also seeks class-action status, claims around 88 percent of Herbalife’s 500,000 US distributors do not make any money.

The complaint is here and it’s … mostly it’s just sad. On a first reading it’s not entirely clear how you should apportion blame for the sadness; I don’t know if this says more about Herbalife or Dana Bostick: Read more »