Bill Ackman Will Not Shut Up by William Green, Obeserver

Get The Full Warren Buffett Series in PDF

Get the entire 10-part series on Warren Buffett in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

In December 2012, Bill Ackman declared war on Herbalife. During a three-hour presentation in New York, he denounced the nutritional-supplement company as a “pyramid scheme” that causes “enormous harm to the most vulnerable communities.” Mr. Ackman also revealed that he had a $1 billion short position and said his target price for the stock was zero.

Over the next two years, he intensified his crusade against Herbalife, which has vehemently denied his accusations. Bill Ackman says his investment firm, Pershing Square Capital Management, has spent $50 million on its campaign, which covered everything from investigative research to legal fees to producing films such as Herbalife Unmasked: An Insider Admits that the “Business Opportunity” Is a Fraud. Pershing also spent “a few hundred thousand” dollars on political lobbying.

Bill Ackman found himself under attack, too. Carl Icahn, who bought a 17.3 percent stake in Herbalife, derided him on CNBC as a “major loser,” a “liar,” and a “crybaby.” Famous investors such as George Soros and Daniel Loeb also loaded up on the stock in what many saw as a classic attempt at a short squeeze, with Mr. Ackman cast as the victim of his own hubris. The media looked on with vitriolic glee. A Vanity Fair article mocked his “uncanny knack for making bold, brash pronouncements and for pissing people off.”

But Bill Ackman is not easily cowed or silenced. On a cold winter’s day in early 2015, we meet in a 42nd-floor conference room in his sleek Manhattan offices, which boast some of the city’s most glorious views. Calm and implacable, he continues to predict that Herbalife will implode “no later than March of 2016” when its “debt comes due.” In the past year, regulators have launched an investigation into Herbalife, the stock has halved, and Mr. Ackman says his bet has finally turned profitable. He vows to go “to the end of the earth” to get Herbalife shut down, “regardless of whether or not I have an investment… Having a reputation for doing what you say you’re going to do is critical. Once you lose that, you have nothing. You can’t be a shareholder activist.”

Bill Ackman is an unusual mixture of ruthlessly effective Master of the Universe and save-the-world idealist. He says he initially shorted Herbalife because he expected to “make a bunch of money for our investors” by exposing it as “a fraud” and persuading regulators to step in. But he also relishes the role of the righteous avenger who wields his financial power to benefit the weak. Herbalife “is preying on the poorest people in the U.S. and 90 other countries,” he claims. “That seems like something worth coming into work to fight. And if I don’t do it, who will? There are very few other people in the world who will take this thing on and who have the resources to do it.”

At first glance, Bill Ackman seems an unlikely champion of the little guy. He grew up as the privileged son of a prominent businessman, then attended Harvard for his undergraduate studies and his MBA. At 48, he has a net worth estimated by Forbes at $2.7 billion. But he is also keenly aware of his humble roots. He speaks proudly of his great-grandfather, Abraham Gechtman, walking from Russia to Austria to Germany in the 1880s, then taking a boat to America, where he apprenticed as a tailor. “If someone had taken his life savings away from him in a pyramid scheme, I probably wouldn’t be here,” says Bill Ackman. “It’s clearly my obligation to return the favor, right?”

Get The Full Seth Klarman Series in PDF

Get the entire 10-part series on Seth Klarman in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

See full article here.

European Investor meeting pres 2015 Q1 Winners & Losers (gross returns)-ackman-pershing