Ackman’s Pershing Square Reveals More Herbalife Ltd. Targets

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Ackman’s Pershing Square Reveals More Herbalife Ltd. Targets

Herbalife Ltd. (NYSE:HLF) is currently under investigation by the Federal Trade Commission after more than a year of public attacks from activist investor Bill Ackman. His firm has been profiling the activities of distributors in an attempt to prove that the nutritional supplements company is a pyramid scheme which takes advantage of low income people. Today Ackman is targeting distributors Michael Burton and Rick and Carla Berg.

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Lead generation rears its ugly head again

Problems with links to lead generation companies have caused Herbalife Ltd. (NYSE:HLF) problems in the past. This time around, Pershing has pointed to several lead generation companies owned by the Herbalife distributors it has highlighted. Each of the three has strong links to lead generation companies. It was lead generation links which resulted in Canadian officials deciding to investigate Herbalife after Ackman’s first distributor spotlight.

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Herbalife said to target low income individuals

The profiles of both the Bergs and Burton suggest all of them targeted low income individuals. In fact, Burton reportedly encouraged people to go into debt so they could become supervisors through Herbalife Ltd. (NYSE:HLF) as soon as possible. Burton appears to have taken his own advice regarding going into debt, as Pershing discovered that he and his wife filed for bankruptcy last year.

One of the companies the Bergs were involved in also encouraged people to go into debt. Their training materials suggest that recruits push others into becoming supervisors by putting the entry fee on a credit card or borrowing money from others. Some of the members linked to the couple also reportedly touted the fact that they had convinced a single mother with very little income to sign up, while another was excited that someone had withdrawn money from their 401K to pay to become a distributor.

Problems with misleading statements

Another reason regulators have become interested in Herbalife Ltd. (NYSE:HLF) is because of concerns that the company’s distributors may be making misleading statements about how much money people can earn by selling the product. Videos of Carla Berg and of Burton show some pretty extreme comments about how much money they were able to make. Pershing notes again that the statements they made are nowhere near typical, according Herbalife’s own filings and statements.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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17 COMMENTS

  1. Bill ackman will short this biach herbalife to ground! Yes I am hoping ackman crucifies herbalife! And make this company go bankrupt!

  2. Want to know what a clown Ackman is? Read the following…

    The story of the Ackman-Loeb cycling trip is so widely known in the hedge-fund eco-system that it has practically achieved urban-legend status, and Loeb himself was eager to remind me of it.

    It happened last summer when Ackman decided to join a group of a half-dozen dedicated cyclists, including Loeb, who take long bike rides together in the Hamptons. The plan was for Loeb, who is extremely serious about fitness and has done sprint triathlons, a half-Ironman, and a New York City Marathon, to pick up Ackman at Ackman’s $22 million mansion, in Bridgehampton. (Ackman also owns an estate in upstate New York and lives in the Beresford, a historic co-op on Manhattan’s Central Park West.) The two would cycle the 20 or so miles to Montauk, where they would meet up with the rest of the group and ride out the additional 6 miles to the lighthouse, at the tip of the island. “I had done no biking all summer,” Ackman now admits. Still, he went out at a very fast clip, his hypercompetitive instincts kicking in. As he and Loeb approached Montauk, Loeb texted his friends, who rode out to meet them from the opposite direction. The etiquette would have been for Ackman and Loeb to slow down and greet the other riders, but Ackman just blew by at top speed. The others fell in behind, at first struggling to keep up with the alpha leader. But soon enough Ackman faltered—at Mile 32, Ackman recalls—and fell way behind the others. He was clearly “bonking,” as they say in the cycling world, which is what happens when a rider is dehydrated and his energy stores are depleted.

    While everyone else rode back to Loeb’s East Hampton mansion, one of Loeb’s friends, David “Tiger” Williams, a respected cyclist and trader, painstakingly guided Ackman, who by then could barely pedal and was letting out primal screams of pain from the cramps in his legs, back to Bridgehampton. “I was in unbelievable pain,” Ackman recalls. As the other riders noted, it was really rather ridiculous for him to have gone out so fast, trying to lead the pack, considering his lack of training. Why not acknowledge your limits and set a pace you could maintain? As one rider notes, “I’ve never had an experience where someone has gone from being so aggressive on a bike to being so hopelessly unable to even turn the pedals…. His mind wrote a check that his body couldn’t cash.”

  3. Ackman has continued to underperform and is resorting to libel to make money. Ackman is a fraud and should be treated as one.

  4. Don’t worry, Rene. We know Herbalife wouldn’t pay you for your tripe. I would say you’re dead wrong. Thanks for for for for your answer. LOL

  5. What a great time of year for a crucifixion. Only Herbalife won’t come back after 3 days, and many similar MLM scams will suffer the same fate. LOL

  6. I don’t make any money stating my comments on HLF. Seems like you think or feel these are strong facts in favor of Herbalife. And I would say they are strong facts. Thanks for for your question.

  7. crucify herbalife and other MLM companies who show distributors big dreams and then squeeze them out of all the little money they have!

  8. You didn’t read Ackman’s new posts, did you Rene? For example, the Burtons are now separated, over $7 MILLION in debt, including almost $1 MILLION to the IRS. Interesting how they had to declare bankruptcy AFTER Ackman’s pressure caused Herbalife to ban Herbalife’s tool scam (Lead Generation) system. Can you spell SCAM??? LOL

  9. Herbalife certainly does have control over them. At least two very high level distributors quit to join another MLM and another literally put a bullet through his head last year after Ackman’s pressure caused Herbalife to ban Herbalife’s tool scam (Lead Generation) system. YOU are the joke, and should be investigated for overt stupidity.

  10. I’ve been saying since 2005: THE TOOL SCAMS (CALLED LEAD GENERATION SYSTEMS IN HERBALIFE) ARE THE BIG PROBLEM. Google “stop the amway tool scam wordpress” to see how the Amway Tool Scam works, and Herbalife is very similar.

  11. Herbalife is in compliance with all US concerning a legal MLM:
    – No inventory loading.
    – No product purchase requirement, monthly or otherwise.
    – No recruiting payment.
    – Commission and royalty checks paid by HLF are for products sold.
    – All products are accounted for. They are sold to customers, members and/or returned to HLF for a refund.

    Very important, the product are the star. Millions of people derive benefits from HLF nutritional products everyday in 91 countries.

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