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It's hard to fault the depth of Bill Ackman's research outlining his short position against Herbalife, and the hedge fund manager has certainly been right before. But the presentation felt more than a little self-serving, writes our columnist Stephen Taub.
Pershing Square's Bill AckmanI have conflicting emotions after sitting through Pershing Square founder Bill Ackman's more than three-hour presentation outlining his case for shorting Herbalife.
On one hand, I am in awe of Pershing Square's excruciatingly detailed and persuasive evidence that Herbalife, a seller of health and related products, is a pyramid scheme, heavily dependent on those connected to the firm for the bulk of its sales. Herbalife is a multi-level marketing company; these companies recruit individuals to sell its products and pay them based on their own sales, plus the sales of any other salespeople they recruit.
Ackman argued that prices of Herbalife's products are inflated, and he pointed to the dearth of sellers and distributors who have attained the company's...