Pershing Square

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]

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 »

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 »

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 »

In 1984, when he was a junior at Horace Greeley High School, in affluent Chappaqua, New York, he wagered his father $2,000 that he would score a perfect 800 on the verbal section of the S.A.T. The gamble was everything Ackman had saved up from his Bar Mitzvah gift money and his allowance for doing household chores. “I was a little bit of a cocky kid,” he admits, with uncharacteristic understatement. Tall, athletic, handsome with cerulean eyes, he was the kind of hyper-ambitious kid other kids loved to hate and just the type to make a big wager with no margin for error. But on the night before the S.A.T., his father took pity on him and canceled the bet. “I would’ve lost it,” Ackman concedes. He got a 780 on the verbal and a 750 on the math. “One wrong on the verbal, three wrong on the math,” he muses. “I’m still convinced some of the questions were wrong.” [Vanity Fair]

  • 20 Feb 2013 at 5:07 PM

Pershing Square: Herbalife Silenced Us

Earlier today it was noted that, to the surprise of many, Bill Ackman and Carl Icahn had refrained from asking questions or dialing in and making sudden outbursts during this morning’s conference call to discuss Herbalife’s fourth quarter earnings.  Obviously this came as a shock on account of Ackman and Icahn taking many opportunities in the past to share their feelings re: the company and each other. And while it’s true both men personally held their tongue’s today, according to Pershing Square, one of its analysts had planned to ask questions on Bill’s and the hedge fund’s behalf but was shot down. Read more »