• King of the Swamp – Bill Ackman and His Billion Dollar Bet to Sink Herbalife

    It’s been awhile since I’ve written about Bill Ackman and his pathetic vendetta against Herbalife. Some new developments have taken place and I thought it might be time for an update. It’s been seven years since Mr. Ackman and his company Pershing Square took a BILLION dollar short position in Herbalife. It was a brilliant move…a real life “Big Short”. The Herbalife stock went into free fall. The stock dropped 10% in 6 seconds triggering circuit breakers and halting trading! It looked like Ackman’s plan to sink the health products giant was going to work, but he was wrong. So very wrong.

    Herbalife didn’t lay down and die. Oh no, they fought back with everything they had. Ackman used his crony influence to trigger a government investigation into the legality of their business model. Ackman went on to hire an army of lobbyists and public relation firms to keep up the attack. His one goal was to make good on his 1-billion-dollar short position in Herbalife. The only way he could do that was to destroy the company entirely.

    After all these years it must be difficult for Mr. Ackman to swallow how healthy Herbalife has become. They’ve streamlined their business model. Endured the attack by an aggressive Federal Trade Commission, yet they remain. They do more than remain, they are thriving. People love their products and use it as a way to their personal entrepreneurial success.

    Recently, Ackman was delivered what should be his death blow. The Federal Trade Commission ruled that Herbalife was in full compliance with their rules. What’s more, they are actually crushing the numbers.

    Herbalife reported the Federal Trade Commission has found it to be in full compliance with the agreement. It said 90 percent of its 3 million retail transactions in the U.S. sales were documented purchases by consumers (as opposed to distributors), which exceeds the 80 percent threshold called for in the company’s agreement with the Federal Trade Commission.

    In other words, the firm’s business model not only is legal, it has taken the steps its regulator ordered and obtained a clean bill of health.

    So, if Herbalife’s business practices have changed and its regulator has signed off, will Ackman back off or at least tell us what this bizarre crusade is all about?

    Thanks to that pesky FTC investigation Herbalife has verifiable bench marks by which to be judged:

    Due to the dedication and diligence of its distributors, in May, 90 percent of United States sales were documented purchases by consumers, comprised of more than three million receipted retail transactions. These results far exceed the 80 percent threshold called for in the Company’s agreement with the U.S. Federal Trade Commission. The Company also announced that approximately 400,000 customers have converted or signed up as preferred members in the U.S. since the program began in October 2016.

    “These figures should put an end to any questions regarding demand for our nutrition products and the strength of our go-to-market business model,” said Richard P. Goudis, CEO, Herbalife Nutrition.

    I’m sorry Bill Ackman. I really am, but it’s time to admit defeat and move on to something that might actually work out for you. According to the New York Times, Mr. Ackman has vowed to take his assault to the ends of the earth. Now that Herbalife’s system has been found completely legal by government regulators, it might be time for crazy Bill Ackman to move along.

    Will he? Doubtful. 1 billion dollars will make you do stupid things.

    S.C. Sherman

    Senior Editor

    Steve Sherman is an author, popular radio commentator, and former Iowa House candidate. His articles have appeared nationally in both print and online for Townhall, Human Events, Clash Daily, Washington Times, Washington Examiner, Red Alert Politics, Forbes, NRATV and others. All of his novels including his most recent tome, Lone Wolf Canyon, a modern day western that infuriates the left and all "Snowflakes," are available here.

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