Ackman Makes Good On Vow To Donate Herbalife Profits

Ackman Makes Good On Vow To Donate Herbalife Profits

Herbalife shares slipped again today, falling as much as 3% after two days of gains. Bill Ackman enjoyed the downward action in Herbalife shares on Monday and Tuesday, as the declines helped his short bet against the company pay off.

And just as Ackman previously promised, he isn’t keeping the profits from his short bet against Herbalife for himself.

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Herbalife, Bill Ackman at war

Ackman’s firm, Pershing Square Capital Management, and Herbalife have traded barbs all week long. There was plenty of talk about why Herbalife stock plunged on Monday and Tuesday, although no clear reason emerged. Ackman spoke on CNBC on Wednesday, and shares dipped for a few hours before rallying after his comments.

He said he was doing “God’s work” and mentioned notorious convicted Ponzi scheme operator Bernie Madoff when he talked about Herbalife. Of course Herbalife issued a statement in response to his comments, and Pershing issued a response to Herbalife.

And the drama continues.

Pershing donates Herbalife profits

One of the key areas of contention between Bill Ackman and Herbalife is the put options his firm owns on Herbalife. The nutritional supplements company has repeatedly accused Ackman of purposely saying things to increase the value of his options. Of course Pershing Square denies the accusation.

Ackman promised in the past that he would donate anything he makes from his short bet against Herbalife. Undoubtedly the purpose for this promise was to attempt to put to rest thoughts about a conflict of interest as he wages the battle against the company, which he continues to allege is a pyramid scheme. benefits from Herbalife short bet

Today Pershing Square announced one of the beneficiaries of the profits it has earned so far on Ackman’s bet against Herbalife. In a press release today, the firm said it is donating some of the money to through the Pershing Square Foundation. The organization provides college scholarships.

The Pershing Square Foundation has committed $10 million to the organization to enable undocumented immigrants with DACA (Deferred Action for Childhood Arrivals) status to pursue a college education. The commitment will be spread over three years. In the next ten years, expects to provide college scholarships to more than 2,000 immigrant children.

Ackman’s firm undoubtedly chose the organization because of some of the accusations he has leveled against Herbalife. It certainly seems fitting anyway, since he has accused the multi-level marketing company of preying on low income immigrant communities, particularly Hispanic communities.

“Working with Latino and other immigrant groups around the country opened my eyes to the plight of these young people,” said Ackman said in a statement. In addition to heading up Pershing Square Capital Management, he also co-founded the Pershing Square Foundation. He added, “I was fortunate to grow up in an environment where I didn’t have to worry about whether or not college would be possible for me. These scholarships will empower young immigrants to pursue their own dreams and goals, and I am delighted to partner with TheDream.US to expand the opportunity for more students.”

Pershing Square’s donation will provide scholarships to 400 more students.

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