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

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top 6 Tax Scams and How to Protect Yourself

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

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!