In a presentation tomorrow (follow our coverage tomorrow), hedge fund activist Bill Ackman says he will reveal why Herbalife Ltd. (NYSE:HLF), a stock he has shorted, will collapse. The Herbalife stock tanked on Ackman’s pronouncement, broadcast on CNBC.

Herbalife

Ackman says his presentation on Herbalife will be the most important in his career

Ackman said the presentation, to be delivered in New York City tomorrow at 10 AM EST, will be the most important presentation in his career.  “How’s that for raising expectations? But we won’t disappoint,” Ackman said as he outlined what he called the “largest public fraud in terms of scale, of countries involved and harm to people.”

In the presentation Ackman said he has new documents from Herbalife “and of hours of recorded video and audio,” he said. “We have internal documents that were given to us by some employees that felt it was in the best interests of the world to know what’s really not going on at the company. We’re going to deliver that in detail.”

At Ackman’s last Herbalife presentation on December 20, Herbalife Ltd. (NYSE:HLF) management said they were excluded from attending. “I want to make it very clear that Michael Johnson (Herbalife CEO) and his senior management team are welcome to come to the presentation,” Ackman said. “We’ll be happy to sit them in the front row if they would like.  We’re happy to let them answer questions or even ask questions during the presentation.”

Ackman has not paid anyone to spread bad information about herbalife

When asked about a recent campaign from Herbalife attacking Ackman on Twitter with the hash tag #theworstofwallstreet and claiming that Ackman is paying people to spread bad news regarding Herbalife, Ackman said “We have not paid everyone to spread bad information about Herbalife. I look forward to going through the facts.”

In a press release, Herbalife said its independent distributors are taking “a stand against the continuing campaign of attacks and misinformation being waged by Bill Ackman and Pershing Square Capital Management.” A meeting that took place in Chicago recently celebrated how Herbalife has positively impacted the lives of distributors. “Bill Ackman has displayed a bald-faced hypocrisy in his sham support for Latinos,” said Pablo Caicedo a member from Lincoln Park, IL who was featured in an Herbalife press statement.  As published in ValueWalk, Ackman has attacked individual distributors, painting them as making outlandish promises of profits when they join the firm.

In an earlier press release Herbalife claimed that Ackman was paying people to spread false information about the company. “Herbalife continues to face an unprecedented and unrelenting attack from Pershing Square to support its $1 billion bet to manipulate and drive Herbalife’s stock price to zero to the detriment of our investors, members, customers and employees. Herbalife is confident that the facts are on its side and that it will overcome Pershing Square’s campaign of misinformation about the Company as the truth about Pershing Square’s increasingly desperate accusations is revealed.”

Herbalife charged Ackman $20 million to discredit the firm

Herbalife Ltd. (NYSE:HLF) then charged Ackman had spent as much as $20 million to discredit the firm. “Pershing Square has admittedly spent more than $20 million and 18 months trying to find former Herbalife members from as far back as 2008 that will complain about their experience with the Company,” Herbalife said in a release.  “In fact, Pershing Square has even been willing to pay multi-million dollar bounties to anyone willing to generate negative publicity against Herbalife and support Pershing Square’s agenda. During this timeframe, more than 1.6 million members have joined Herbalife in the U.S.  If even 1 out of 10,000 of those members had a complaint, that would yield 1,600 complaints.”

In response to the attack, Ackman said Herbalife is “clearly panicking,” saying Herbalife Ltd. (NYSE:HLF) is “freaked” because they know the information Ackman possesses and will reveal tomorrow. “We are going to expose an incredible fraud tomorrow.  The fraud is in the way they fundamentally operate.  These so-called nutrition clubs where they talk about places for people to get together and learn about good nutrition and lose weight.  That’s not what’s happening at these venues.”

Herbalife Ltd. (NYSE:HLF) stock is trading down nearly 10 percent on the day, netting Ackman close to $100 million in profit after his five minute interview on CNBC.

Ackman: Herbalife is going to collapse