Pershing Square Capital Management Founder and CEO Bill Ackman spoke with FOX Business Network’s (FBN) Deirdre Bolton regarding the recent report that federal prosecutors and the Federal Bureau of Investigation (FBI) are probing potential market manipulation of Herbalife. On whether Herbalife can clean up their act, Ackman said, “there is no future for Herbalife as a legal company,” and, “I have a lot of confidence in the Department of Justice.” Ackman goes on to say, “we are totally open to full and fair look into details,” and that the senior management at Herbalife “knows they are running a pyramid scheme.” On Carl Icahn’s relationship with Herbalife Ackman said, “I think Carl Icahn at this point is actually stuck,” and, “If Carl wanted to sell the shares he’d have to get off the board.” On the direction of the investigation Ackman said, “I don’t think we will be here two years from now,” and, “either the business will have imploded or the government will have shut it down.” In regards to the average retailer Ackman said, “I get an enormous number of thank you notes, emails from your average retail investor who have followed us.”
Bill Ackman: There is no way Herbalife can clean up its act
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Ackman: I have confidence in the DOJ
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What’s next for Bill Ackman?
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Bill Ackman on whether Herbalife can clean up their act:
“If they actually completely cleaned up their act their sales would basically deteriorate. My point here is, there is no future for Herbalife as a legal company.”
Bill Ackman on whether Ackman is relieved the FBI is investigating:
“I have a lot of confidence in The Department of Justice they have very talented lawyers. We are totally open to full and fair look into details.”
Bill Ackman on why Herbalife life hasn’t sued Pershing Capital directly:
“They are afraid of our getting access to their inside information which we would use to further prove our case against the company. We are pretty sophisticated by this point of understanding what to look for we’ve been doing our best in helping regulators and assisting them to understanding the business. If we actually had access to Herbalife’ s inside information it would make it easier for us to prove our case. Herbalife life in my opinion, the senior management of the company knows they are running a pyramid scheme. They are facing potential jail time.”
Bill Ackman on Carl Icahn and Herbalife:
“I think Carl Icahn at this point is actually stuck. He’s got five directors on the board; he owns 17 million shares of stock in the company. If Carl wanted to sell the shares he’d have to get off the board. I think Carl realizes that unfortunately for him he can’t sell.”
Bill Ackman on what direction the investigation will go:
“I’d love for this to be resolved. I’d love for this government to finish doing their work. I respect the fact that they are careful. I’d not be shocked to wake up a week from now, a month from now to some serious government action and I look forward to that day. I don’t think we will be here two years from now, I think we will be resolved. Either the business will have imploded or the government will have shut it down.”
Bill Ackman on what this means for the average retail investor:
“I get an enormous number of thank you notes, emails from your average retail investor who have followed us in general growth or air products or anything specific make your list, we have a very, very large group of investors many of them who we don’t know that follow our work. The work we did on Herbalife life is very important, more so for the little guy if you will than the big investor. Herbalife life stock will go to zero, there is no middle ground for the company, the business will deteriorate. I do expect the government to act before the company disappears.”
