Bill Ackman Is Taking A Beating Over The Herbalife Ruling (CNBC)
Friday’s ruling that Herbalife effectively is not a Ponzi scheme adds another layer to an already brutal year for hedge fund titan Bill Ackman. The Pershing Square Capital chief has had a long-standing and very public short position on the dietary supplement company. He already had been sustaining major losses on the bet, but the Federal Trade Commission ruling is the sharpest blow yet. Though the commission found much fault with the way Herbalife operates, it stopped short of the “pyramid scheme” tag at Ackman has alleged in public statements and video presentations.
Herbalife: Ackman’s Pyrrhic Victory (Bloomberg)
On the surface, it looks like Carl Icahn came out on top in the battle over nutritional-supplements seller Herbalife. But rival Bill Ackman has reason to feel at least somewhat vindicated. Icahn has been one of Herbalife’s biggest backers (making a roughly $500 million paper profit to date), while Ackman’s Pershing Square famously bet $1 billion in 2012 that the company would be shut down by regulators. On Friday, the three-year-plus saga drew to a close as Herbalife announced a settlement with the Federal Trade Commission that allows it to keep operating. Icahn claimed victory, saying “the shorts have been completely wrong on Herbalife.” But were they really?
Impala Prepares Hedge Fund To Bet On Commodity Rebound (Reuters)
Impala Asset Management is forming a new hedge fund to bet on rising commodities prices, according to a letter sent to clients and seen by Reuters on Thursday. Impala, a $2 billion stock-focused hedge fund manager based in New Canaan, Connecticut, plans to launch the Impala Resource Fund on August 1 with no more than $125 million, according to the note, which was sent out to clients on Wednesday. Impala leader Bob Bishop expects that there will be an 18 month to 36 month “cyclical commodity rally” and believes the “timing of this opportunity is very soon” according to the note. The launch comes amid a punishing rout in commodity prices because of slowing growth in China. The price of U.S. crude oil has lost more than half its value, copper is down about 30 percent and natgas has dropped by 60 percent over the past two years.