Saturday, 25 June 2016
Last updated 20 hours ago
Mar 7 2013 | 12:21am ET
A member of Herbalife's board of directors says that Pershing Square Capital Management's William Ackman is merely "throwing rocks" at the "gold standard" of direct-selling companies.
Jeff Dunn, a former Coca-Cola Co. president and a director of the nutritional supplements company since 2009, said he's seen no evidence that Ackman's allegation that Herbalife is a pyramid scheme is true.
"I wouldn't be here if I had any questions about it," Dunn, now CEO of Wm. Bolthouse Farms, told Bloomberg News. "From a direct-selling standpoint, this company is a gold standard."
Dunn said he extensively researched Herbalife and met with CEO Michael Johnson before joining the company's board, and that Ackman's claim that the company is a sham and that its shares will prove worthless are way off the mark.
"Most of his assertions and analysis of the marketing plan and questions around that are just wrong," Dunn said. "His findings are wrong. They looked at the financials wrongly."
Pershing Square has a $1 billion short bet against Herbalife.
"You certainly have short-sellers and other people out there banging their drum, but they don't have what I'd call pure objectivity," Dunn said. "They are trying to support their own assertions. There doesn't seem to be a lot of data that supports it. It's more about throwing rocks."