Tag Archive for ackman

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Tables Turn In Ackman VS Herbalife Battle

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Bronte Capital, an Australian-licensed and USA-registered fund manager, posted on its blog a response from the Securities and Exchange Commission to a Freedom of Information Act (FOIA) requesting any documents pertaining to “investigative market manipulation in Herbalife stock by or on behalf of Pershing Square.”
The SEC refused to respond to the request and stated that it the agency can withhold records if it is “compiled for law enforcement purposes.” However, the letter does go on to note that by withholding documents, Pershing Square, or any related parties, is not necessarily being investigated for any violations.

The SEC’s statement made it clear: “The assertion of this exemption should not be construed as an indication by the Commission or its staff that any violations of law have occurred with respect to any person, entity, or security.”

In an

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Herbalife Wins Major Lawsuit

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In a second major win for the week, Herbalife’s newest victory is a mark for things to come. Reuters reports: 
Herbalife Ltd (HLF.N) won the dismissal of a lawsuit that claimed the maker of weight-loss and nutritional products fraudulently portrayed itself as a legitimate company, and that shareholders lost money because it was actually an illegal pyramid scheme.
U.S. District Judge Dale Fischer in Los Angeles said that shareholders led by two pension funds did not show that questions raised about Herbalife’s business by hedge fund manager William Ackman and various investigators showed that the company had fraudulently inflated its stock price.
Ackman and his Pershing Square Capital Management LP have campaigned against Herbalife since December 2012, when they revealed a $1 billion bet against the Los Angeles-based company. Herbalife has long denied it is

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Big Plans For Herbalife: Opening $100 Million Plant And Planned Counter Attack Against Ackman

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ValueWalk reported: 
Fox Business Network’s (FBN) Charles Gasparino reports Herbalife Ltd. (NYSE:HLF) is planning a counter attack on Pershing Square Capital CEO Bill Ackman, following the cancellation of a meeting with Herbalife by Ackman. Gasparino reports, “people inside Herbalife are telling me that it could be legal,” possibly “a lawsuit about stock manipulation.”
On Herbalife planning a counter attack against Bill Ackman:
“They are planning some sort of counter attack. People inside Herbalife are telling me that it could be legal, clearly like a lawsuit about stock manipulation or something else. What they are saying is they are clearly going to do an attack.”
In other news: 
Herbalife Ltd. will officially unveil its $100 million manufacturing facility in Winston-Salem on Jan. 16, showing off the plant to the media and local elected officials.
The nutrition products company (NYSE: HLF) will hold an invitation-only grand opening of its 800,000-square-foot “Winston-Salem Manufacturing and Innovation Facility.” Herbalife COO Rich Goudis, will attend, and Winston-Salem Mayor Allen Joines and Forsyth County Board of Commissioners Chairman David Plyler are expected to be there, too.

Herbalife officials said the facility currently employs about 350 and is expected to employ more than 500 by the end of the year.
The plant at 3200 Temple School Road is located at the former site of Dell Inc. Local

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Ackman Going After Herbalife… Again

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Herbalife Ltd. (NYSE:HLF) is back in the spotlight yet again, thanks to Bill Ackman’s firm, Pershing Square Capital Management. This month marks two years since the activist investor publicly announced his short of the nutritional supplements company.
Now his firm accuses Herbalife distributors of “routinely making false, dangerous and illegal medical claims to potential customers.
Pershing Square issued a press release making these new allegations this morning. The firm also posted a video about it on its anti-Herbalife website. The video allegedly shows some distributors of Herbalife’s products violating regulations set forth by the Food and Drug Administration and also an injunction issued in California in 1986. That injunction demanded that Herbalife and its distributors stop making the illegal medical claims immediately.
The firm’s representatives reviewed publicly available video that shows Herbalife Ltd. (NYSE:HLF) executives making medical claims about the company’s products as well for more than 30 years. Pershing Square said the multi-level marketing company can’t deny knowing about this practice because high level executives like CEO Michael Johnson also made allegedly misleading statements.
Distributors name several medical benefits
In the video compiled by Pershing Square, distributors name a number of medical issues that Herbalife Ltd. (NYSE:HLF) products can supposedly help with and in some cases possibly

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Another Wall Street Principal Shows Support For Herbalife

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Kyle Bass, founder and principal of Hayman Capital Management, says he believes Herbalife is not a ponzi scheme and is a legitimate business model on an interview with CNBC. He even goes as far as saying they’ve had one of their own traders sign up with Herbalife to gain an understanding of the model to make sure it’s legitimate. 
Bass became well-known after successfully predicting and benefitting from the subprime mortgage crisis by purchasing credit default swaps on subprime securities issued by various investment banks (similar to shorting the bonds).
Bass has since continued to attract media attention for his prediction of the European sovereign-debt crisis and his expectations regarding the economic future of Japan and Argentina.
Bass reminded CNBC viewers that Ackman originally went long on Pre-Paid Legal stocks (now a privately held company called Legal Shield) and shared his views on it not beign a pyramid scheme, nearly an identical explanation to why he thinks Herbalife is a pyramid scheme and is shorting that stock instead. 
How long Ackman will continue to battle the Herbalife stock remains to be seen as he placed a hefty $1 Billion dollar short on the company about a year ago. The Herbalife/Ackman battle has become one of the most talked about

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Reuters Reports On Herbalife, Says Ackman’s Attacks Fails To Resonate In Nutrition Clubs

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The following article reported by Reuters recently shares the Ackman vs Herbalife fiasco in a rather objective manner. Ultimately, his claims aren’t resonating with Herbalife members or nutritional club owners. 
New York hedge fund manager William Ackman says Herbalife is a pyramid scheme that exploits the poor. He has taken a $1 billion bet against the company’s stock and spent millions on research to attack the nutritional supplements seller, including making a video showing former distributors who claim they were deceived and lost money trying to sell its products.
Yet a visit to some of  the clubs that have been set up to dispense the company’s shakes, teas and other items, largely to the Hispanic community in the U.S., shows that it has fans. These are consumers who stress their health has improved and distributors who are thankful to have the opportunity to run their own businesses.
In conversations at 10 such clubs that Reuters reporters visited in recent weeks in the Los Angeles area, New York and Newark, New Jersey, more than 20 people said they had lost a substantial amount of weight while consuming Herbalife products. These claims could not be verified by Reuters but if true the comments cast a favorable light on

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5 Things Herbalife Wants You To Know

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Over the past two years, shares of multi-level marketing giant Herbalife have been immensely volatile, largely due to the activities of activist hedge fund manager Bill Ackman, who has been waging an aggressive campaign against Herbalife’s management, accusing the company of fraud.
At times, his accusations have prompted sharp sell-offs, but more recently, the focus seems to have shifted to Herbalife’s earnings. Last month, shares of Herbalife tumbled after its earnings report came in short of analysts’ expectations.
Management remains confident in its business, and in a subsequent earnings call, pointed out a number of factors investors should be aware of. Below are five of the most important quotes from Herbalife’s most recent earnings call, courtesy of S&P Capital IQ .
The market for its products is growing
Herbalife’s products are, broadly speaking, aimed at helping to facilitate weight loss. A meal replacement shake, Formula 1, is the cornerstone of its portfolio, while it also offers supplements such as metabolism-boosting tea and multivitamins.
So long as global obesity rates remain elevated, Herbalife’s management believes the market for its products is large. Citing a recent study, the company’s CEO Michael Johnson quantified the opportunity for Herbalife.
The Harvard School of Public Health estimates that the worldwide rate of obesity has nearly

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Ackman Prepares To Extend Bet Against Herbalife

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Bill Ackman, the hedge-fund manager who has mounted a two-year campaign to prove Herbalife Ltd. (HLF) is a pyramid scheme, will extend his bet against the company should he need to.
The cost of maintaining a position in options that profit from a drop in Herbalife shares has declined “substantially” since Herbalife canceled its dividend, Ackman said in his quarterly letter to investors dated today. Most of the over-the-counter contracts Pershing currently holds will expire next year.

“We will extend their terms by paying additional premiums if it is necessary to do so,” Ackman wrote in the letter, which was obtained by Bloomberg News.

Ackman has bet $1 billion against Herbalife and mounted a campaign that was capped by a more than three-hour presentation on July 22 purporting to show that the company is an Enron-style fraud. Investors brushed off his arguments, sending the stock up 25 percent in one day.
Today’s letter also acknowledged that the lengthy presentation and the hype he generated ahead of it were missteps. Herbalife shares, which have since tumbled after the company’s earnings missed projections later in July, are down almost 20 percent in the past year.
Originally reported by Bloomberg

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New Moves Are Proving The Herbalife Business Model To Be Widely Accepted

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According to Bidnessetc.com, recent moves are proving the Herbalife Business model to be widely accepted. 
Herbalife Ltd. (HLF) stock is up 4% today, and has gained roughly 7% since Bidness Etc asked investors to go long last week. The rise today, followed the news of Capital Research increasing its stake in the company and a number of insiders taking long positions in the stock. These moves have improved investor sentiment, leading to a rise in the stock. In addition, the company’s long term prospects remain strong and Bidness Etc rates the stock a Buy at current valuations.
According to recent news, Capital Research has increased its stake in the company from 8.5% to 10.1%, joining the league of investors like Carl Icahn and Fidelity Investments, both of whom have stakes larger than 10%. After increasing its stake, Capital Research has become the third-largest shareholder in the company.
The continuing confidence of Carl Icahn and now this move by Capital Research reflects their belief that Herbalife is not a pyramid scheme and that investigations by Federal Trade Commission (FTC) are not expected cause any significant damage to the company’s reputation.
In addition, a number of insiders including Chief Operating Officer Richard Goudis, President Des Walsh, and Chief Financial Officer Desimone, have

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Herbalife Calls Bill Ackman “The Worst Of Wall Street”

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Herbalife’s digital media strategy fighting off Bill Ackman’s short campaign appears to include comparing the fund manager to Jordan Belfort-a convicted felon who ran a 90s-era boiler room, wrote a best-selling book and had a movie starring Leonardo DiCaprio made about him.
On July 17, verified Twitter account @HerbalifeTRUTH tweeted a superimposed an image of Ackman on a “Wolf of Wall Street” movie poster calling him the “Worst of Wall Street.” 
The Twitter account linked to a press release slamming Pershing Square’s short bet against Herbalife.
“Ultimately, Pershing Square’s campaign is based on propaganda, and we look forward to demonstrating that its assumptions will crumble under serious and independent scrutiny.”
It’s unclear who exactly is behind the @HerbalifeTRUTH Twitter account. It links back to Iamherbalife.com. The two authors listed on the site areHerbalife and Andy Amsler, who works for digital media campaign company Podesta Group.
Ackman is loudly short Herbalife-a multi-level marketer that sells weight loss shakes and nutritional supplements. Ackman believes the company operates as a “pyramid scheme” that targets lower income individuals.
Herbalife has denied and continues to deny Ackman’s accusations.
On Tuesday, Ackman will be giving another one of his presentations on an investigation into how the company operates its nutrition clubs.
“An in-depth analysis and examination of these clubs-which Herbalife claims

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