Ackman's battle with Herbalilfe gets political


Both Bill Ackman and Herbalife (HLF) hired lobbyists last year to press their respective cases with politicians spending $264,000 and $2M, respectively.

Herbalife also spent $1.3M lobbying on its own behalf.

Massachusetts senator Edward Markey recently asked both the SEC and FTC to look into Herbalife.

California representative Linda T. Sanchez also asks the FTC to look into the firm.

Ackman's Pershing Square hedge fund has made a $1B short bet that HLF shares will plummet after regulators agree with his thesis that the company is a pyramid scheme.

Shares currently trade at $65, down from the peak of $83.51 reached on January 8.

636 mutual funds have positions, up from 609 a year earlier.

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Comments (12)
  • Larry Smith
    , contributor
    Comments (3181) | Send Message
     
    Exactly what is wrong with the country. A rich hedge fund guy, makes a large short bet, gets television and print media to cover his press conference and air his claims. Then goes to DC to get some politician to help his cause. All in an attempt to make himself some money. Then folks wonder why people protects against the so-called 1%.

     

    I have no position in HLF.
    10 Mar 2014, 12:11 PM Reply Like
  • loufah
    , contributor
    Comments (307) | Send Message
     
    I don't like it much, but it's a freedom of speech issue. If you try to prevent lawmakers from talking with constituents and supporters, they won't make good decisions. (And they'll probably talk to them, anyway).
    11 Mar 2014, 11:03 AM Reply Like
  • sacathanas
    , contributor
    Comments (1726) | Send Message
     
    And, just to add to Larry's comments, the guy thoroughly abused the media and political processes (as documented in the NY Times). Really a disgusting display.
    11 Mar 2014, 07:59 AM Reply Like
  • Dampflok
    , contributor
    Comments (1388) | Send Message
     
    Larry,
    What is wrong with this country is that these fraudulent, predatory schemes have been allowed to go on for so long without regulatory intervention. It takes the means of a hedge fund manager to get this finally moving. By the way, he pledged to donate all profits.
    11 Mar 2014, 08:01 AM Reply Like
  • vitotheking
    , contributor
    Comments (7) | Send Message
     
    You have no idea what MLM is all about. If you have good products that work, and people keep buying them on a regular basis because they work for them, why is that ""fraudulent"? I have been in 2 MLM businesses and my daughter is a mother of 3 toddlers who is helping to support her family in one . It takes hard work and some people join up and find that "it is not for them". i do not a Herbalife distributor. But in my distributorships, I lose 80% of my people in the first 3 months. I don't stuff them with products butI do try to train them to be sales people. Most are not cut out for it and they drop as sales people but many (the majority) keep using the products and remain distributors just to get he discounts. What is wrong with that. I only make money when SALES are made. Not for recruiting. I don't understand these claims "that they lose their life savings" Then they are stupid.

     

    I know for example that peole taker a job as a commission car salesman. the yonly get paid if they sell,. they don't know how to sell and they work for a few months and don't make anything! they live on savings trying to learn the business. It's not working for them and they get themselves in a hole. Whose fault is that. The car dealership? You don't cut off everybody's balls because your neighbors have rotten kids and so no one should have kids !
    11 Mar 2014, 08:56 AM Reply Like
  • Yteeld
    , contributor
    Comments (1145) | Send Message
     
    Larry, you nailed it. These die hard shorts mistakenly believe that breaking and or bending the law is fine as long as they profit. They also hide what their other investments are because they know that someone will find a problem with the companies that they think are good investments. It's hypocrisy at it's best.
    11 Mar 2014, 08:19 AM Reply Like
  • Cestlavie
    , contributor
    Comments (279) | Send Message
     
    Shorts know they are doomed due to the 1979 Supreme Court ruling legalizing MLMs that don't pay recruiting fees and have buy back policies. Ackman is desperate now that years are slipping away. Obama and Edith Ramirez the head of the FTC are best friends with Michael Johnson so I don't think there is going to be any federal action against Amway and others anytime soon
    11 Mar 2014, 08:35 AM Reply Like
  • Dampflok
    , contributor
    Comments (1388) | Send Message
     
    Time to change that 35 year old fossil. So its back to who is friends with whom? There was a previous article about buying legitimacy. By the way, the comments we read here on the pro side are from die hard distributors who will fight tooth and nail not to lose the income!
    11 Mar 2014, 09:21 AM Reply Like
  • Jeffjacobjames
    , contributor
    Comments (1182) | Send Message
     
    Dampflok - I'm not an $HLF distributor. I'm a retail store manager. I'm long HLF because I believe Bill Ackman is an idiot! MLM is a legal and profitable way to conduct business. Warren Buffett owns 3 MLM companies! Read the blog from TheSkeptic21 on Twitter to see more info about Ack and his desperate attempts to manipulate this stock.
    11 Mar 2014, 10:18 AM Reply Like
  • User 20505811
    , contributor
    Comments (1685) | Send Message
     
    HLF is a scam which preys upon weak, uneducated folks, often when they are down on their luck--at at time when the last thing they need is to buy a bunch of useless overpriced "supplements" and secret sauce milkshake mixes.

     

    Given the weak state of regulation in this country, thank God there are shorts who look out for predatory frauds like HLF.

     

    Laughable to hear from HLF shills, who criticise that Ackman has spent $$ lobbying to get media and political focus, when HLF has outspent him 20 fold. And to brag that the scam will continue based on Johnson's friendships with Obam and Ramirez is too perfect.

     

    Oh and Johnson's not a one-percenter? And the "board" of HLF isnt comprised of one-percenters?

     

    Karma rules. Sometimes it takes more time than it should. People who benefit from this predatory scam, preying on weak, vulnerable peopl, will get theirs ultimately.

     

    I am short the stock, long puts, well in the money. Nothing I like better than a trde where I win and bad guys lose.
    11 Mar 2014, 10:07 AM Reply Like
  • powershake
    , contributor
    Comments (2291) | Send Message
     
    Just about every big company, including Herbalife, gives money to lobbyists, P.R. firms and nonprofits to promote its business. There really are no rules, as long as you don't break the law or libel somebody.

     

    The difference with Ackman is that he's promoting his business by trying to hurt Herbalife's business. The NYT has penty of evidence of how Ackman is spending money to negatively influence public opinion about HLF.

     

    His agony will end soon in defeat. Herbalife will be Ackman's Waterloo. Rich educated billy thought he could buy everyone with his smarts, money and influence. Well, he made a huge mistake with HLF- own up to it and move on or pay more agony and money to Ichan, Stiritz and longs...
    11 Mar 2014, 02:02 PM Reply Like
  • PAMPERO747
    , contributor
    Comment (1) | Send Message
     
    I believe Bill Ackman is an idiot! AAA
    12 Mar 2014, 04:39 AM Reply Like
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