Wall Street rejects Ackman's Herbalife 'death blow'
By Svea Herbst-Bayliss and Ryan Vlastelica
NEW YORK (Reuters) - Billionaire investor William Ackman's latest volley of accusations against Herbalife Ltd on Tuesday missed its mark on Wall Street, with investors sending the stock price soaring 25 percent.
Ackman, who has been battling the California-based nutrition company for 19 months and has a $1 billion bet it will eventually go bust, told 500 people in a New York auditorium - and thousands watching the webcast - that Herbalife is a criminal enterprise that targets minorities, counts nonexistent
customers, and breaks labor laws.
Ackman's $14.7 billion hedge fund Pershing Square Capital Management unveiled its $1 billion short bet against Herbalife in December 2012, calling the company a pyramid scheme where members earn more money from recruiting than by actually selling products to end users.
Herbalife has rejected the claims.
In his three-hour presentation, Ackman said officials are moving too slowly against Herbalife. The Securities and Exchange Commission, the Federal Trade Commission, and the FBI are among those probing the company's business practices.
With this presentation, which he billed as the most important in his career, he shifted his appeal to investors, saying that by laying out all of the evidence against Herbalife he was giving them a reason to start selling.
Ackman said he hopes to cause the company to collapse and called for it to be shut down. Continuación...