New York – Hedge fund manager Bill Ackman says that he will hold a presentation Tuesday that will prove that nutrition company Herbalife is a “fraud.”
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The announcement sent shares of Herbalife down more than 11 percent in trading Monday.
Ackman, the head of Pershing Square Capital Management, has been battling Herbalife since 2012, saying that the company is a “pyramid scheme.” He says the direct seller makes most of its money from recruiting new salespeople rather than selling its supplements and weight-loss products.
Herbalife denies the charges.
Ackman holds a “short” position in Herbalife, meaning he is betting that the company’s stock will drop and profit when it does.
In a TV interview with CNBC Monday, Ackman says he has hours of recorded video and audio that will prove his allegations.
Seriously this is news? Good grief I figured that one out as a college student in the late 1990s. The real question is not the Pyramid scheme but whether the supplements are high quality and good for health
This guy is making tons of money out of stupid reporters. Guess what, doesn’t make a difference if he is right or not, he gained on the 12% drop.
He is arguing his stuff for a few years. He even lobbied the FBI to start investigating, but nothing turned up, and their stock hadn’t fallen as he predicted.
So he resorted to shorting and making news to affect the stock price.
Idiot.
The stock has doubled since 2012.