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Van Voorhis: Swampy Ackman defies FTC in $1 billion war on Herbalife

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Billionaire hedge fund owner William A. Ackman, the founder and CEO of Pershing Square Capital Management, prides himself on being a driven activist investor, who uses his massive influence to turn around companies and benefit not just his investors, but society-at-large.

The New York Post reported Oct. 7  Ackman took a beating his public short on the company Herbalife’s stock, as the company’s value has soared.

The Post reported that Ackman is hurting because of an 11 percent jump in the stock after a recent offer to repurchase $600 million of outstanding shares was leaked.

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The rise in the value of stock hurts Ackman because he is banking on Herbalife’s stock price crashing and burning. This creature of Wall Street tried to use the power of the Washington swamp to kill a viable and healthy company – and it did not work.

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After his very public five-year war on Herbalife ended in a settlement with the Federal Trade Commission, and full compliance by the company, Ackman keeps working to destroy them by any means necessary.

Most people would wonder why a self-described moral do-gooder like Ackman would keep fighting for the implosion of a company which not only employs thousands of everyday Americans, but also has met and exceeded the compliance standards set by the FTC.

It’s because he has more than just $1 billion on the line.

It’s his reputation that is on the line.

According to Fortune, “at about 2 p.m. on Wednesday, Dec. 19, 2012, CNBC’s Kate Kelly broke the news that billionaire Bill Ackman’s hedge fund had taken a massive short position—about $1 billion worth, we know now—in the stock of a nutrition company called Herbalife. Herbalife stock then fell 10 percent in six seconds, triggering circuit breakers and a temporary trading halt.”

After labeling the company as a “pyramid scheme,” Ackman has spent millions of dollars of his investors’ money hiring top-tier lobbying and public relations firms to get the federal government on his side – and beat the company into bankruptcy.

The New York Times reported in 2015 that his war against Herbalife “is a wager that Mr. Ackman has pledged to ‘take to the end of the earth’ and one that will ultimately depend on whether the government punishes Herbalife.”

To draw the government’s attention, Mr. Ackman has employed a handful of law firms and the Global Strategy Group, a public affairs firm that organized rallies and conducted opposition research on Herbalife. He also hired lobbyists to attract the attention of lawmakers, including Senator Edward J. Markey, Democrat of Massachusetts, when Mr. Markey was a member of the House. In January 2014, months after his staff had met with Mr. Ackman, Mr. Markey wrote letters to the F.T.C., the S.E.C. and Herbalife.

That wasn’t the end of Ackman’s conniving efforts to discredit the company, however. ABC News reported that Ackman even offered to pay a ‘whistleblower’ as much as $3,600,000 if he could provide the government with damaging information about the company.

Ackman also appeared in a documentary about his struggle, titled “Betting on Zero,” where he made the extraordinary claim that he expected Herbalife shares to go to $0. The motive here was clear – to cause a government investigation that would result in the death of Herbalife – and a massive profit that he could line his pockets with.

After four years of crusading to get the government on his side, the FTC concluded their investigation by handing Herbalife a $200,000,000 jjudgment and demanding that they reform their business practices. To Ackman’s dismay, the agency disagreed with his label that Herbalife was a pyramid scheme, and the stock jumped over 10% on news of the settlement.

According to The New York Times the agreement with the F.T.C. will require Herbalife to overhaul its system for compensating its customers and recording sales of its supplement drinks and other food products.

After overhauling their compensation system, Herbalife announced earlier this summer that they had successfully documented over 90 percent of their purchases, which greatly exceeded the 80 percent threshold set by the FTC less than a year ago. The stock is currently within arm’s length of its all-time high, and is significantly higher now than when Ackman shorted it almost five years ago.

As an owner of one of the country’s largest hedge funds, it’s well within Ackman’s rights, however objectionable those rights may seem, to try to discredit and deface a company for his own profiteering motives. What’s not okay is that to achieve this aim, he did everything in his power to weaponize the federal government, and use your and my tax dollars for his private greed.

For sake of argument, let’s forget for a moment what Ackman has done in years past. One could make the claim that Ackman was simply trying to hold the company accountable, and wanted the FTC to investigate what he felt were unfair consumer practices. That would certainly fit within the framework of Ackman’s moral investor mantra.

If that claim is true, then the FTC laying down a $200 million judgment, and forcing Herbalife to revise all of its business practices under the scrutiny of the full force of the federal government should be punishment enough. Meeting those deadlines earlier than necessary certainly proves that management has taken the problem seriously and is committed to ethical business practices going forward.

What is critically important here is that despite Herbalife being in full compliance with all government edicts, Ackman continues to wage war on a company operating well within the law and providing solid stock returns to its investors.

When Ackman pledged to take the Herbalife fight to the end of the earth, he wasn’t doing it for any moral reasons. If he really believed in simple moral rectification of companies, he would logically be more than happy to give up this fight.

But it is not about righting the wrong of companies for him. It’s all about winning a war at any cost, even if that means stopping at nothing to destroy a profitable, well-run company that has proven it has righted its wrongs.

In an article Ackman wrote in his student newspaper at Harvard, he told his audience: “Let’s face up to what HBS (Harvard Business School) represents. We spend 90 percent of our studies at HBS pursuing the maximization of the dollar.”

The same man who competed on his school’s rowing team with dollar signs affixed to his oars is continuing to use his crony capitalist friends in government to sink Herbalife’s ship. Perhaps it’s time that Ackman faces up to the reality that his battle is unwinnable, and the only person who is going to keep losing is him.

Peter Van Voorhis is a conservative activist, commentator, and journalist who focuses on political issues affecting millennials. Find him on Twitter @RepublicanPeter.

Big League Economics

Goldman Sachs Claims Forcing Americans to Wear Masks Would Save U.S. Economy $1 Trillion

Multinational corporations want Americans to submit to the virus regime.

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Corporate titan Goldman Sachs has produced research that contends the U.S. economy would save five percent of GDP, or $1 trillion, due to a national mask mandate using federal force to make people wear masks.

“If a face mask mandate meaningfully lowers coronavirus infections, it could be valuable not only from a public health perspective but also from an economic perspective because it could substitute for renewed lockdowns that would otherwise hit GDP,” the researchers wrote.

Goldman’s analysts claim that forcing people to wear masks at the federal level would impact states like Florida and Texas, where masks are not mandatory, and “meaningfully” increase mask usage nationwide. Even though the mandate would be grossly unconstitutional, Goldman apparently believes that the ends justify the means.

They estimate that a mask mandate would increase mask usage overall by 15 percent and cut the daily growth of new coronavirus cases by between .6% and 1%. Goldman is fueling the false dichotomy where the public must to accept either a strict mask mandate or a Draconian shutdown of society. They claim that the next lockdown would take an additional $1 trillion out of the economy.

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Former Vice President Joe Biden, who is attempting to unseat President Trump in November, has stated that he would use federal power to force Americans to wear masks.

“Yes, I would—from an executive standpoint, yes, I would . . . I would do everything possible to make it a requirement that people had to wear masks in public,” Biden mumbled last week.

The stage has been set for round two of the coronavirus panic to cripple society, even though the establishment has been encouraging Black Lives Matter pogroms against white people simultaneously.

Big League Politics has reported on the so-called experts as they have kept the fear propaganda going despite the immense hypocrisy:

The Centers for Disease Control and Prevention (CDC) are continuing their fear-mongering about the coronavirus pandemic, desperately trying to dissuade Americans from living their lives.

“Right now, communities are experiencing different levels of transmission occurring, as they gradually ease up onto the community mitigation efforts and gradually reopen,” the CDC’s deputy director for infectious diseases, Jay Butler, said to reporters during a press briefing on Friday.

“If cases begin to go up again, particularly if they go up dramatically, it’s important to recognize that more mitigation efforts such as what were implemented back in March may be needed again,” he added.

Butler emphasized that the “pandemic is not over” and urged localities to re-institute Draconian shutdown policies based on “what is happening within the community regarding disease transmission.”

The CDC has displayed an extreme amount of incompetence throughout the pandemic, which has destroyed their credibility and made them into a national laughingstock.

The establishment will never allow normalcy to return. The Orwellian nightmare, enabled by COVID-19 hysteria, is here to stay.

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