As expected, the war of words between Bill Ackman and Herbalife Ltd. (NYSE:HLF) is gaining an aggressive speed. The investor conference held by Herbalife Ltd. (NYSE:HLF) today, which was supposed to quell all misgivings and misrepresentations about the company, was labelled as “distorted and mischaracterized” by Bill Ackman in a statement sent to us by Pershing Square Capital Management. He said the presentations held by officials of Herbalife were supposed to argue and refute each of the allegations that were leveled at the company by his firm, Pershing Square. However, Herbalife’s show fell short of achieving that. He said that the company completely ignored the earnings statement for distributors, an inconsistency pointed out in Pershing Square’s December 20th presentation. Ackman detailed in his 300 page short thesis on Herbalife that 93% of distributors make zero gross earnings. However, Herbalife’s management did not discuss the earnings at all in their conference today.
Ackman also said that his company will take up Herbalife’s offer to ask questions and is going to put forward a series of questions that will help a large number of people ” in understanding the truth about Herbalife”. He said many other interested parties had contacted Pershing Square and have provided more details related to Herbalife’s false business model and practices.
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Just a day before the investor day at Herbalife Ltd. (NYSE:HLF), Dan Loeb disclosed his 8 percent stake in Herbalife’s common stock, calling Ackman’s accusations “preposterous”. Today Carl Icahn also confirmed his long position in Herbalife. The nutritional supplement company has become an overnight sensation. Ackman finds all this attention on Herbalife to be good for his cause. The investor meeting hosted by Herbalife was unable to bring about any significant appreciation in stock market, after peaking at $42.49. The stock has fallen more than 3 percent for the day, at the time of this writing.