Ackman 'Einhorns' Herbalife

Dec 20 2012 | 9:46am ET

The markets have been anxiously awaiting David Einhorn's take on Herbalife for months. The nutrition and weight-control company's shares even soared 17% in May when the Greenlight Capital founder failed to mention it at the Ira Sohn Investment Research Conference.

The markets may have been looking to the wrong man: Yesterday, Pershing Square Capital Management's William Ackman "Einhorned" Herbalife.

The activist hedge fund manager called Herbalife a "pyramid scheme" and said that he has been shorting the stock for seven or eight months, CNBC reports. He's expected to go into greater detail in his own speech at today's Sohn Conference.

But even without those details, Herbalife's shares hit the skids, falling more 12% yesterday and tripping a single-stock circuit-breaker along the way.

Herbalife isn’t taking the criticism lying down, accusing Ackman of attempting to "illegally manipulate the market."

"The allegation that Herbalife is a pyramid scheme is bogus," CEO Michael Johnson said. "Make no mistake: Today's announcement isn't about Herbalife's business model. It's about Bill Ackman's business model."

Johnson further urged the Securities and Exchange Commission to investigate Ackman's statements.


In Depth

Q&A: TCA Fund Management's Bob Press on Small-Cap Private Equity

Aug 25 2016 | 8:55pm ET

The emergence of private credit as a replacement for traditional bank financing...

Lifestyle

Kiawah: Island Reversal

Aug 24 2016 | 9:59pm ET

Looking for real estate investments but the typical real estate fare isn’t cutting...

Guest Contributor

Old Hill Partners: Embrace Illiquidity

Aug 9 2016 | 2:39pm ET

The age-old financial concept that higher yields are the result of higher risk and...