Ackman 'Einhorns' Herbalife

Dec 20 2012 | 10:46am 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: Old Hill's Stone On Private Debt, P2P And Credit Bubbles

Jun 6 2017 | 7:52pm ET

While institutional capital continues to flow into the broader private debt sector...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

AIMA: How The U.K.'s SMCR Will Affect U.S. Firms

Jun 20 2017 | 6:29pm ET

U.S. investment managers need to think seriously about how tough new U.K. conduct...

 

From the current issue of