Bill Ackman

That or he’s going to burn all his clothes and replace them exclusively with items exclusively purchased at the retailer, or hell, just move into the place. Whatever it takes to show he’s more committed to this place than ever. Read more »

CAN YOU FEEL THE EXCITEMENT? No, right? Okay good. A senior audit partner at KPMG Los Angeles did a bad thing and “was involved in providing non-public client information to a third party, who then used that information in stock trades involving several West Coast companies.” And now KPMG has resigned as the auditor of a couple of companies, and withdrawn their 2010/2011/2012 audit reports, which, given that 10Qs are due in a couple of weeks, is a bummer for those companies. Bob’s Auditing Service & Carwash of Rancho Palos Verdes is going to be busy.

And of course one of the companies is Herbalife, which has really had more than its share of excitement. Honestly if I was insider trading I’d probably pick a company a bit further from the limelight?1 Anyway HLF was halted for most of the morning while while they puttered around thinking things over, only to eventually release a pretty bland press release that stresses that KPMG resigned “solely due to the impairment of KPMG’s independence resulting from its now former partner’s alleged unlawful activities and not for any reason related to Herbalife’s financial statements, its accounting practices, the integrity of Herbalife’s management or for any other reason.” It eventually re-opened down 2.3%.

The other company is … currently a player to be named later? Speculation is focusing on Skechers, a California-based KPMG client that was also halted, which seems plausible enough. Who knows? [Update: Yep, Skechers.]

Okay further baseless speculation! Read more »

As has been discussed at length in the past, should hedge fund manager Bill Ackman ever decide to take up a new line of work, he would no doubt have a bright future hosting a guerrilla-style makeover show wherein he and a sidekick drive around in a van looking for people who could benefit from his discerning eye and then ambush them on the street and weigh in on what’s wrong with their [choose all that apply: bangs/clothes/arms/ass/life in general].1 Although not classically trained, the Pershing Square founder has years of experience, dating all the way back to his days as a Harvard Business School student, when fellow classmates were asked if streetwalker was the look they were going for.

One money manager said Mr. Ackman was a trustworthy and loyal friend, but also “an acquired taste” because of his tendency to speak very directly where others might tread gingerly—or not at all. When Mr. Ackman was a student at Harvard Business School, the friend recalled, he took it upon himself to tell at least one woman she was overly made up. The delivery: “You know, I’m just saying this because I have your best interests at heart, but you have too much makeup on.”

Those who can get past the bluntness to see that Ackman’s constructive criticism comes from a place of love ultimately benefit from his counsel. According to one testimonial: Read more »

If you’re an activist investor your job is to (1) think of an idea for how to make a company’s stock go up, (2) buy stock in the company, (3) convince them to do your idea, and (4) sell high. Step 3 tends to involve lots of attention-seeking – it’s easier to wear a company down into doing your idea if they’re constantly hearing about it from other shareholders and reporters and stuff – but steps 1 and 2, importantly, don’t.1 If you tell everyone about your great idea for Apple to issue GO-UPS,2 then they’ll all realize that Apple will certainly do it and unlock tens of billions of dollars of value, so they’ll bid up the stock before you can buy it and you’ll lose the opportunity to benefit from all those gains. That may be a bad example but just work with me here.

There’s another way of putting that, which is: if you secretly conceive of an idea to make Apple a better company, and then secretly buy up a bunch of Apple stock, and then announce to the world “surprise! I have 12% of Apple’s stock, and a brilliant idea that starts with a thematically appropriate lowercase i!,” and the stock goes up, and you make a lot of money – isn’t that unfair? You got to buy stock at the low, pre-publication-of-your-idea price; the people who sold to you were bamboozled into selling out too low because they didn’t know about your great idea. It almost “smacks of insider trading.”

Or something. I may not be doing this theory justice because I think it’s silly: that great idea is your idea; why shouldn’t you be able to make money off of it? (And why should anyone else?) The money is your incentive to come up with the idea in the first place, and do the hard ego-stroking work of pitching it to CNBC and the target company; if you had to share it with free-riders why would you take on the responsibility? We talked about this a little last year when there were vague rumors that the SEC was buying into it, and that they might require investors to disclose 5% stakes within 1 day of acquiring them (instead of the current 10 days), and include synthetic share ownership in computing the 5%, in order to make it harder for activists to secretly accumulate shares. I have not heard much about that proposal since, though I hesitate to assign any causality.

But last week in another, colder part of town, someone proposed the same thing. Canada, I mean. Canadian securities regulators proposed: Read more »

One day Herbalife will either be put out of business by consumer-protection regulators or it won’t. If it is then Bill Ackman will make a lot of money and Carl Icahn will lose a lot of money, and if it isn’t Ackman will lose a lot of money and Icahn will make a lot of money, and in the meantime everyone will shout that everybody else should be investigated.

That’s proceeding apace. Ackman yesterday:

In a statement late Tuesday, Pershing Square Capital Management’s Ackman said that he was pleased that the NCL was requesting an FTC investigation and believes it will show that the company is a pyramid scheme.

Herbalife today:

We regret that the National Consumers League has permitted itself to be the mechanism by which Pershing Square continues its attack on Herbalife. If anything, it is Pershing Square that should be investigated by appropriate authorities. Its actions are motivated by a reckless $1 billion bet against the company based on knowingly false statements about Herbalife.

Carl Icahn, whose Herbalife position keeps growing, has also been known to make some investigate-Ackman noises.

Now Herbalife may or may not be a pyramid scheme but I’ve always thought that demands to investigate short sellers are unfair and one-sided. People who say mean things about stocks they’re short are always accused of manipulation. People who say nice things about stocks they’re long – which happens all the time – are rarely accused of market manipulation.1

But not never! I assume Daniel Ravicher is a little nuts but still, I like his style: Read more »

Henry Winkler once said, “Assumptions are the termites of relationships.”1 In 2011, Bill Ackman assumed it was okay to talk to The New York Times about David Einhorn’s business and, like a homeowner forced to move out for three days while a pest control company sprays the place, he’s been forced to pay. Big time. Read more »

Bill Ackman Is A Billionaire

Which is nice, although Carl Icahn is a billionaire 20 times over, and the richest alternative investment fund manager on Earth. Read more »