Ackman’s Key Aim Is To Shutdown Herbalife Ltd.

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Ackman’s Key Aim Is To Shutdown Herbalife Ltd.

Hedge fund Pershing Square’s Bill Ackman said on Monday that “one of the most important things” he can do is to shut down nutritional supplement maker Herbalife.

Addressing the Council of Institutional Investors’ in Washington D.C., Ackman repeated his argument that Herbalife has caused “enormous harm to a very vulnerable population” by focusing its efforts on vulnerable immigrant Latinos in the United States and other low income people.

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The global supplement and food product maker has denied running a pyramid scheme ever since Ackman’s Pershing Square Capital Management, initially announced its $1 billion short position in December 2012. Ackman and Pershing Square have run an active research, media and lobbying campaign against Herbalife in the last couple of years.

The SEC, FTC and state regulators are investigating Herbalife.

Herbalife said it would make a response to Ackman’s latest salvo soon.

Herbalife shares were up fractionally to $42.72 on Monday, and are 13.47% so far in 2015.

Carl Icahn a big part of the problem

During his speech Monday, Ackman also commented that when he first took a position against Herbalife back in 2012, he did not expect that billionaire investor Carl Icahn would enter the fray on the long side, and “go on CNBC once a week saying how great the company was and how bad I was.”

Ackman went so far as to say the whole issue would be closed and Herbalife’s pyramid scheme would have already collapsed if not for Icahn’s support.

More on Ackman and Herbalife

Ackman also said he understands the SEC has limited resources to investigate crimes, and believes the the agency should have “quarterly sit-downs” with top short sellers in order to detect fraud potential fraud.

After his speech at the conference, Ackman refused to comment about any meetings he may have had with regulators, but he did say that he is meeting with some government officials on his current visit to the capital.

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3 COMMENTS

  1. Bill Ackman has as much chance of shutting down HerbaLife as he does stopping people from getting on low sugar and high nutrient diets to loose weight.

  2. Herbalife promotes healthy lifestyle, many customers actually got healthier after taking Herbalife products. Just check the recent Herbalife world record of the largest number of people doing intensive workout within 24 hours. What’s wrong about that? Herbalife only compensates based on products sold. If Herbalife sell products through a retail store, they would still have to pay a portion to the retail store. What’s wrong about paying the retailers? Herbalife does not force members to sell products. They have a buy-back policy in case the members can not sell the products they took. What’s Ackman’s base to keep calling Herbalife a pyramid scheme scam? If I keep telling everyone that my neighbor Joe is a drug dealer, even though he is a perfect law biding citizen. Wouldn’t I get lawsuits and get punished? How come Ackman can get away with it? Sure some Herbalife new members will fail within the first year (about 50%). Isn’t that true that any types of startups will have a good chance to fail? Even if a new member failed, Herbalife offers to buy back the products that the member took. The loss should be negligible. Why Ackman keeps saying this is a 100% pure scam? Isn’t it obvious who is running a scam here?

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