The battle between Herbalife and activist investor Bill Ackman rages on just as strong as ever. Another event has been scheduled for tomorrow in Illinois, although Ackman doesn’t appear to be involved this time.
Herbalife management thinks the timing of tomorrow’s event is suspicious. They also suggest people are being paid to speak out against the company.
Herbalife event scheduled
Illinois Attorney General Lisa Madigan has reportedly been investigating allegations against Herbalife that were raised by the Illinois Herbalife Campaign last year. The group, in connection with the Brighton Park Community Council, will hold a press conference tomorrow with the intent of urging Madigan to conclude her investigation into the nutritional supplements company, which it accuses of being a pyramid scheme that is “unfairly targeting Hispanics.”
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The group said dozens of complaints have been filed with Madigan’s office and with the Federal Trade Commission. The complainants allege that they lost thousands of dollars “due to Herbalife’s deceptive business practices,” according to the press release. They further accuse Herbalife of recruiting Latinos “through a high-pressure, get-rich-quick scheme.”
Centro Comunitario Juan Diego Executive Director Olivia Hernandez said in a statement, “Herbalife has made billions of dollars by specifically targeting vulnerable members of the Latino community and we need Attorney General Madigan to put an end to Herbalife’s brazenly dishonest business practices. We’ve raised awareness of the allegations against Herbalife and shared the stories of the victims filing complaints. What else do we need to do to for Attorney General Madigan to help our community?”
Tomorrow’s event is scheduled for 10 a.m. Central at the James R. Thompson Center in Chicago.
Timing is everything?
Herbalife management believes that the timing of tomorrow’s event could be related to the expiration of some options they think Ackman’s firm Pershing Square owns. An Herbalife spokesperson provided the following statement to ValueWalk via email:
“The timing of this latest event should be viewed in context of the imminent expiration of options we believe are owned by Pershing Square. Herbalife is a proud 35-year old company with millions of satisfied customers around the world who use our products daily to improve their health, including hundreds of thousands in Illinois. Our Gold Standard consumer protections, which include a full money back guarantee, are the best in the industry and we urge anyone who has had a bad experience to contact us direct.”
It should be noted that Ackman’s firm has kept its name disconnected from tomorrow’s event. The press release mentions neither Bill Ackman himself nor his firm. We have reached out to Pershing Square for a comment and will update this article if a response is received.
Herbalife also reminds Wall Street that some researchers reportedly hired as consultants by Pershing Square were questioned in connection with an investigation into potential alleged market manipulation. Ackman confirmed the questioning of some of their consultants. No one has been accused of any wrongdoing in this matter.
Further, they say that Ackman’s “multi-million dollar campaign of misinformation” has brought “people and groups paid to speak out” against Herbalife.
Not all Illinois Hispanics oppose Herbalife
Herbalife has long maintained that it partners with the Hispanic community and has regularly produced prominent Hispanic leaders and also Illinois-based Hispanic distributors who support it. Among Herbalife’s Hispanic supporters in Illinois is Silvia Muir, an independent distributor, who is speaking out against Ackman in his campaign against Herbalife.
“I am offended by Bill Ackman’s claims that he is our friend,” Muir said. “He is actually attacking Latinos with his unfounded and misguided campaign against a company that has helped Latinas such as myself, achieve my health and fitness goals and become a thriving entrepreneur. This deeply angers me and it’s time for the truth to come out — that the only friend of Bill Ackman is his bottom line and that he stands to benefit financially by taking down my businesses and thousands of others across the country.”
Additionally, U.S. Hispanic Leadership Institute President Dr. Juan Andreade, Jr. has spoken out in support of Herbalife.
“In Illinois, USHLI’s home base, Herbalife is responsible for over 4,000 jobs, both direct employees and through its suppliers and manufacturing partners in the state, and USHLI is proud to support Herbalife and applauds the opportunities the company provides Latinos for economic empowerment and healthy living.”
Shares of Herbalife ended the trading day today down by 2.26% at $42.84 per share.