The battle over Herbalife Ltd. (NYSE:HLF) has been raging for more than nine months at this stage and the front keeps getting wider and wider. In the latest twist, politicians from Los Angeles have become involved on both sides of the Herbalife debate. The Los Angeles Weekly reporter Gene Maddaus had a piece on the conflict published today.
The former mayor of Los Angeles Antonio Villaraigosa joined Herbalife Ltd. (NYSE:HLF) as a senior adviser in the first week of September. The Democratic politician served as mayor of the city from 2005 until this year. On the other side of the aisle sits former California state assembly speaker Fabian Núñez, who is now working for Bill Ackman in his bid to discredit the company.
Battle of Los Angeles
According to Maddaus, the two politicians are old friends. Fabian Núñez, who is working against the company, has been speaking in the interest of his Latino constituency. Núñez says that Herbalife Ltd. (NYSE:HLF) takes advantage of Latino distributors—which Herbalife has disproportionately—with exaggerated promises of wealth and success.
Núñez is holding the Ackman line by repeating the narrative that Herbalife Ltd. (NYSE:HLF) is a pyramid scheme. Only those at the top, according to Núñez, are able to reap real rewards from the company’s products. Núñez has said that he will try to get state regulators and the state attorney general to take a look into the company.
Herbalife Ltd. (NYSE:HLF) CEO Brian Walsh is clear about the reasons the company has hired men like Antonio Villaraigosa to bat for its side. He calls the important consultants hired by Herbalife “opinion leaders and decision makers.” The company has stated that Antonio Villaraigosa will not work for the company as a lobbyist.
As Bill Ackman’s $1 billion short against Herbalife Ltd. (NYSE:HLF) heads toward its one year public anniversary in December, the investor has already lost a lot of money on the bet. Shares in the company have risen by more than 120 percent since the year began. Ackman admitted defeat in his bid to reform J.C. Penney Company (NYSE:JCP), but he doesn’t seem at all willing to give up on Herbalife Ltd (NYSE:HLF) just yet.
The Los Angeles front in the Herbalife Ltd. (NYSE:HLF) battle may seem unusual, but the company is based in Torrance, just 20 miles away from the heart of the city. In Los Angeles, both Ackman and Herbalife Ltd (NYSE:HLF) are fighting on the company’s home turf.