Wednesday, 1 April 2015
Last updated 7 hours ago
Jul 22 2014 | 2:30pm ET
William Ackman called it the “most important presentation” of his career. But the Pershing Square Capital Management founder’s latest attack on Herbalife did not prove the “deathblow” he had hoped.
The activist hedge fund manager today lambasted Herbalife’s nutrition clubs, alleging that they target economically disadvantaged people and minorities to prop up what he calls the nutritional supplements company’s pyramid scheme. The presentation was viewed by more than 10,000 people online, as well as several hundred in person at the AXA Equitable Center in New York.
Over 250 slides, Ackman sought to show that Herbalife’s customers are “phantom or fictitious.” But he had no bombshell to reveal after a two-year, $50 million investigation into more than 240 Herbalife clubs, and the markets responded by sending Herbalife shares up 15%—recouping the loss they suffered yesterday when Ackman promised a “deathblow” to the company he’s had a $1 billion short against for a year-and-a-half.
Ackman said that the nutritional clubs amount to free labor for Herbalife, ripping off people who “don’t realize they’re being defrauded.”
“It’s a tragedy,” he said, calling it “a fraud perpetrated by Herbalife’s senior management and members of its Founder’s Circle, Chairman’s Club and President’s Team conceived, designed and executed to exploit the poor.” He added that the clubs amount to “a violation of the labor laws.”
Christine Richard, a former Bloomberg News reporter now working with Ackman, said Herbalife is selling “smoke and mirrors” and turning “fake club traffic” into customers. She said that the company puts its trainees on “a treadmill” that costs them thousands of dollars to buy Herbalife products.
Ackman choked up when he said “you have a New York Stock Exchange company specifically targeting people and using the American Dream principles…. They sell the American dream. Its criminal.” He called Herbalife CEO Michael Johnson a “predator” and urged regulators to “shut it down,” which he said is taking “too long.”
Herbalife shot back that Ackman’s claims are “completely false and fabricated.”
Mar 9 2015 | 6:35am ET
As more investors look to diversify, many are beginning to use retirement funds to invest in alternative assets such as private equity and real estate. Kelly Rodriques, CEO & President of PENSCO Trust Company, explains how companies can connect with those looking to use their retirement accounts in a different way. Read more…
Mar 20 2015 | 12:45pm ET
StreetWise Partners, a non-profit organization that works with low-income individuals to help them overcome employment barriers, raised over $275,000 at the 2015 Raising the Ante Charity Poker Tournament and Casino Event last Wednesday evening at Capitale. Here are some photos from the event. Read more…