Is One of Soccer's Biggest Sponsors Running A Pyramid Scheme?
It's the takedown everyone's talking about. Herbalife's PR team likely spent the holidays in overdrive after hedge fund manager, Bill Ackman, launched this lengthy and detailed attack on the fast growing nutritional products maker last Friday. That's the same Herbalife that earlier this year announced a $44 million, 10-year sponsorship with the LA Galaxy making it the single largest and longest sponsor of a Major League Soccer club. This, in an effort to extend its already deep ties to soccer tournaments and teams throughout the world. The presentation, a year in the making, was accompanied by the simultaneous launch of the website factsaboutherbalife.com. Together, they have sent the company stock spiraling down 33% in the past week alone. The 334 slide presentation describes the company as a pyramid scheme that "targets Latinos, African-Americans, ethnic minorities, the young, and stay-at-home moms – focusing on those in financial need." Meanwhile, Herbalife has issued a statement calling the claims "distorted, outdated and inaccurate" and says it will respond in detail at a conference on January 7th.
If you've got a couple hours, here's the full presentation..
As astutely pointed out by BusinessInsider.com, Ackman's Pershing Square Capital Management now appears to be stepping up its attack on the company with these google ads, which appear each time the word Herbalife is searched...
Ackman will donate the first $25 million in profits from his short position in Herbalife to the Ira Sohn Foundation, a non-profit dedicated to pediatric cancer and any profits beyond that will go to Ackman's personal foundation, the Pershing Square Foundation, which is dedicated to fighting poverty.