Ackman Sends Herbalife Shares Tumbling Down
Published By : 22 Jul 2014 | Published By : QYRESEARCH
After Bill Ackman made claims to bring out the truth about Herbalife’s pyramid scheme, the healthcare company’s shares have declined to the lowest in the three months. Herbalife ensures weight loss through consumption of its weight-loss shakes, has taken a serious beating ever since Ackman, head of Pershing Square Capital Management LP, vowed to bring out Herbalife’s fraud in 2012.
Ackman has been very vocal about this health club, and is said to have devoted USD 50 million of investor’s money to prove the farce. He said that there have been some ongoing undercover investigations about which are likely to present the truth today.
He has drawn parallels to Enron, stating that their pyramid structure of luring in people into their multilevel marketing resembles Enron’s treacherous trading rooms.
Ackman is intent of shutting down Herbalife, and has even bet a significant amount of money to prove that Herbalife simply sells its products at inflated prices, misrepresents sales figures, and fools its distributors. Following these accusatory new reports, Herbalife’s stock dropped down by 11% to USD 54.02 as on yesterday, which marks the biggest decline since April 11.
The truth to be unveiled today will not only strengthen Pershing Square’s claims, but also show an in-depth analysis of how Herbalife only initiates social gatherings and fools people through their fake pyramid structure.
Herbalife’s response to Ackmans’s accusations is that they are mere desperate theatrics.