In July of last year I wrote a piece on Herbalife – “Is Herbalife (NYSE:HLF) a Pyramid Scheme?” – following the presentation by Bill Ackman, the legendary hedge fund manager and founder of Pershing Square Capital Management, where he exposed Herbalife to be a pyramid scheme. The Herbalife stock price jumped the day of his presentation as some of his hedge fund peers conspired against him. However, since then the company has lost more than half its value, proving his doubters wrong once again.
Commenting last week Ackman believes the stock is on its way to zero: “It’s a race to the bottom. Will the business fall apart before the government intervenes or will the government intervene before the business falls apart”.
One thing is for certain, Bill Ackman is the real deal. In an industry of spoofers, he speaks with a clarity and a confidence, backed up by his laborious research, which is inspiring.