Editor’s note: This article was first published in July 2014 and reports intraday trading on 22 July 2014; Herbalife’s share move, Ackman’s roughly $1 billion short and the gain since his first report are from that day. Herbalife settled with the US Federal Trade Commission in 2016, and Ackman exited his short around 2018.
Bill Ackman can’t be having a good time of it: while he was delivering a new presentation on the dangers of Herbalife, which Ackman himself had billed as the most important presentation of his career, Herbalife’s shares were soaring as he spoke.
Right now, Herbalife is up more than 18%, despite all the effort the Pershing Square manager has put into raising doubts about the legality of its business model.
Remember that Ackman has long been claiming that Herbalife is a pyramid scheme and that its shares are worth $0.00. He also opened one of the largest short positions (bets on a falling price) in history, worth 1 billion dollars, a position that must be costing him a fair amount of money and credibility.
Still, in the stock market you have to take the long view to see whether he is really wrong or not.
Ackman continues to stand by his view and his position, although today the market seems to have literally laughed at him with this astronomical rise.
He who laughs last laughs best? Perhaps, but since Bill Ackman published his devastating report, Herbalife shares have risen 33%, and today investors seem to have made their view on the matter clear: they trust in the legitimacy of Herbalife’s system.
Featured image: Herbalife Nutrition, CC BY-SA 4.0, via Wikimedia Commons.



