Herbalife Ltd. (HLF) CEO on Bill Ackman: ‘We Want The SEC to Take Action’

Page 1 of 2

PERSHING SQUAREBy now, you’ve probably heard what hedge fund manager Bill Ackman, manager of Pershing Square Capital, reportedly thinks of Herbalife Ltd. (NYSE:HLF)‘s business model. Originally reported by CNBC’s Maneet Ahuja and Kate Kelly, “Bill Ackman is short the nutritional-supplement seller,” and “has told people he considers the business to be little more than a “pyramid scheme.”"

These claims are “according to someone familiar with the matter,” so it’s not exact clear who was responsible for the leak, but the source did say that Ackman “put on the bearish Herbalife position about seven or eight months ago.”

In response to the reported position, shares of Herbalife fell by more than 12% in trading today, and further losses were seen after hours.

For those who don’t remember, fellow billionaire David Einhorn was inadvertently involved with a Herbalife scare earlier this year, when the Greenlight Capital hedge fund manager simply asked a few intelligent questions on the company’s earnings call. Einhorn’s questions were over disclosure, and were cleared up, but Herbalife investors were worried that the infamous short seller was short.

He has not disclosed a short position in the time since, but judging by the market’s reaction to Bill Ackman’s reportedly bearish sentiment toward the stock, investors are still a bit testy.

Why exactly is that the case? It may have to do with one particularly intriguing court case late last year.

A commercial court in Belgium ruled in November 2011 that Herbalife’s operations in that country were a “pyramid system,” though the company calls it a “multi-level” sales system.

It must be said, however, that the Federal Trade Commission has investigated the company on multiple accounts, each time deciding that no wrong-doing has occurred, failing to come to the conclusion that Herbalife did not engage in direct selling — a major complaint of most bears. Moreover, the FTC hasn’t found Herbalife guilty of any missteps regarding its customer/salesperson classification.

All in all, the company has been found guilty of nothing in the United States, and Herbalife CEO Michael Johnson was on CNBC earlier today calling Ackman’s allegations “blatant market manipulation.” He had quite a few other things to say as well. You’ll want to continue to the next page.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!