After Big Bet, Hedge Fund Pulls the Levers of Power | Hacker News Reader

After Big Bet, Hedge Fund Pulls the Levers of Power

nytimes.com

102 pointskapilkale71 comments

This might be the most comically wrong piece of journalism I've read in my entire life. Ackman should be given a medal for what he's doing to this snake-oil selling pyramid scheme. He has even disavowed any personal profit from his investment. He hasn't made any secret of what he's doing. Short selling is a hugely important market mechanism that allows these fraudulant companies to be sussed out. If all the lobbying is disgusting to you, be disgusted with the system that requires it, not Ackman for playing the game. You don't think Herbalife is doing the same lobbying? I almost can't believe this article was published in the New York Times and not on a late night infomercial selling false hope to the downtrodden.

What is the really evil lobbying at play here? Telling a Congresswoman that a company has bad business practices and should be investigated by the FTC? His lobbying allegedly consists of: "organiz[ing] protests, news conferences and letter-writing campaigns." This is evil?

The innuendo that interests group and congressman switch their allegiance based on who has paid the most is pretty yucky, but also not Ackman's fault. But no, the general running of a campaign to bring down a terrible company is not a bad thing at all. I was alluding to some other comments here that used the word 'disgusting'.

Of course it's Ackman's fault - he's the one bribing all those people. He's much bigger problem than people taking the bribes. He's the one trying to exploit the system for financial gain.

Of course trying to ruin a company by bribing government officials to begin a witch hunt investigation is wrong if you stand to profit billions of dollars from that witch hunt.

Given the enormous profit he'll realize if he's successful in discrediting Herbalife, I can easily discount all of his other arguments as BS. He has no credibility in the matter if billions are at stake.

Note that I'm not defending Herbalife. Maybe they are scammy company that should be investigated and regulated more by the government - by that investigation shouldn't happen because a billionaire starts buying politicians, lobbyists and "non-profit" lapdog organizations.

US government already has established channel for complaining about unethical companies: Better Business Bureau. They don't need manufactured complaints.

I agree with your comments except this part: "US government already has established channel for complaining about unethical companies: Better Business Bureau. They don't need manufactured complaints."

The BBB is a private organization with nothing to do with the government. Some would say the BBB is a protection racket.

The innuendo that congressman switch their allegiance based on who has paid the most is also just that, and mostly a misunderstanding of how the game works. You don't donate to people who don't agree with you: you donate to ones who do agree with you, to make sure they keep getting elected. If you're a coal company, you don't need to pay Congressmen to support strip mining the mountains bare. You can find plenty who believe deep down in their heart it's the God-giving right of people to do that. You then donate to those guys, to ensure they stay in power.

Political influence is both more subtle and more shocking than the popular caricature of "bribing a Congressman." American politics is far more sophisticated than that. Here, you don't just write a check to get the decision you want, at least not typically. You do things like convince an entire state that an industry that damages their health and their land is actually a crucial part of their culture, history, and heritage, and that anyone who wants to reign it in are an existential threat to their community. That's the kind of influence that a nosey prosecutor will never be able to pin on anyone.

Notice the article attempts to curry favor for the supplement company by name-dropping minorities: "Herbalife sells vitamins through distributors...many of whom are lower-income Latinos or African-Americans."

It is as though we should immediately side with a company on the sole basis that it purports to help minorities.

Folks, not every company that purports to work with minorities is good.

Many of these supplement companies are, in fact, peddling snake oil[1]. Who their distributors are should not be a deciding factor. I think back to the old command[2], "Do not deny anyone justice in his lawsuit simply because he is poor, nor favor a person's lawsuit because he is poor."

[1]: http://www.sciencebasedmedicine.org/?cat=7 [2]: http://bit.ly/1oFfDq1

In general I think the whole "astroturf" critique is wanting. It relies for its efficacy on the notion that grassroots lobbying is pure and good and right. But there's nothing necessarily great about grassroots efforts. They can be just as wrongheaded, small minded, or self interested as any other interest group.

So sure astroturf campaigns try and borrow the positive glow of grassroots, but since the glow is undeserved to begin with that's a pretty minor peccadillo.

If Herbalife crashed tomorrow, I would open the champagne. I think it's exactly as exploitative as Ackman has said. I think they -- like most network marketing efforts -- are in the business of selling hope to well-meaning, desperate suckers. It's a shame that the article doesn't cover any of that.

That said, I think the article raises a legitimate concern. The ends do not justify the means. Astroturfing, dubious involvement of community leaders and government officials, large checks, letters from 'average citizens" who don't recall writing: all bullshit.

I agree that we should hate the game. But the reason we should hate it is that when people play it, they weaken the foundations of our society. If we only hate that when the wrong people do it, then we're part of the problem.

By supporting people who play the game and play it with vigor, we're not only supporting but strengthening the mechanisms on which the game is based.

Every single one of the organizations which helped in the lobbying effort all have an incentive to preserve the problem to which they themselves are the solution (credit: Clay Shirky). Lobbyists and every organization described in this story are all trying to preserve all the problems with our current system. Without those problems, they'd all be out of a job tomorrow.

The fact that there is tons of money made playing this game gives all the big players incentive to hire the services of every institution and individual that makes a living off this game.

I'm all for Ackman doing something noble, but the profit motive is only serving to strengthen all the institutions that we should be trying to dismantle in favor of a more informed populace with better means to participate directly.

If I had to choose better the existence of a scummy enterprise like Herbalife and a totally screwed up lobbying system, I would definitely choose keeping around Herbalife as the lesser of two evils.

If only Ackman had some way to hold a short position on the power institutions running Washington D.C.

If Herbalife is scum (I have no personal opinion on that subject), then honest protests, lobbying and information should be enough. Making it a profit-oriented thing discredits the entire endeavor.

Besides, if you can profit from destroying a company for noble reasons, what's to stop hedge funds from destroying innocent companies in a similar way? Although maybe that already happens a lot.

Having argued in favor of the article, let me give some props to Ackman: honest protests here aren't enough. Scams of all sorts and this one in particular work by taking advantage of the vulnerable. Part of what makes people vulnerable is a lack of political power.

Given that our government is a pay-to-play enterprise, I'm glad that somebody is paying to go after Herbalife. If people are going to destroy something for profit, I'd rather it were an exploitative company like Herbalife. Rather than, say, a perfectly good mattress manufacturer: http://www.nytimes.com/2009/10/05/business/economy/05simmons...

I only gave it a half-hearted read, but I assume it's standard journalism's "give both sides equal treatment."

Also known as "false equivalence" and is the reason why climate quacks get so much air time.

Comparing Bronte Capital to climate quacks is in itself false equivalence.

Fair enough.

You seem really sure of yourself.

Here's the counter argument from a noted short seller:

http://brontecapital.blogspot.com/2013/07/it-was-night-befor...

http://brontecapital.blogspot.com/2013/01/notes-on-visiting-...

That was an interesting read summed up in these final lines:

"Bill Ackman a Harvard educated (magna cum laude) billionaire New York hedge fund manager bet over a billion dollars on a short position (imperilling his fund and his reputation) without checking the facts. And he did not check the facts because he was so rigid with a misplaced silver spoon that he could not stoop to sit on a subway for thirty minutes and talk with poor people for ninety minutes."

Didn't check the facts? I've seen the 200+ slide PowerPoint he made on this, he's done gobs of research.

I have to imagine that it was tongue-in-cheek. And if it wasn't, then I don't understand, either.

Without spending a minute examining the facts at ground level: i.e. checking how the company, and its distributors, actually work, not merely reading the fucking financials.

How would you do that assuming that most sales don't happen through people who regularly go to a Herbalife Nutrition Center?

Ackman is outspent by Herbalife in lobbying: Ackman spent $264,000 last year vs $2 million by Herbalife

http://www.reuters.com/article/2014/03/09/us-herbalife-idUSB...

Article seems relatively balanced to me. And I don't think we should fault Ackman for shorting a company he's lobbying against. But having publicized too-close ties w Representative Sánchez, any change in his Herbalife position should me met with serious suspicion. This isn't an article about the ethics of shorting & lobbying, or nutritional supplement pyramid schemes vs. Wall Street -- it's about insider trading.

Very interesting to note that bet happened nearly two years ago. Herbalife still has not crashed and Ackman lost half a billion on it already.

Fighting herbal supplement companies and for profit colleges? Is this guy supposed to be the villain, or a hero?

He's a hero in my book. He shorted a company because he vastly overestimated the interest that the government and the business community would have in exposing and rectifying an open scam that preys on the ignorant. Now he has to become an activist to save that investment.

Money where his mouth is.

His history with MBIA: https://en.wikipedia.org/wiki/MBIA

"Ackman [...] called for a division between MBIA's bond insurers' structured finance business and their municipal bond insurance side, despite statements from the insurance companies that this would not be a viable option.

"He argued that the billions of dollars of CDS protection MBIA had sold against various mortgage backed CDOs was going to be a problem. He also argued that it was not proper for MBIA, which was legally restricted from trading in CDS, to instead do it through a second corporation, LaCrosse Financial Products, which MBIA described as an 'orphaned subsidiary.' Ackman bought credit default swaps against MBIA corporate debt as a way to bet that it would crash. When MBIA did, in fact, crash as the financial crisis of 2008 came to a head, he sold the swaps for a large profit. Ackman reportedly attempted to warn regulators, rating agencies and investors about the bond insurers' high risk business models."

Herbalife, a company that sells vitamins and other health supplements through independent distributors, many of whom are lower-income Latinos or African-Americans.

That's one way to put it, yes.

What's another way?

I’m guessing challenging the health benefits brought by their products, or the scientific background of their users and comparing the overall business model to… say snakes marinated in oil.

Pyramid scheme selling entirely unproven crap.

The same could be said of any religious organization, and sometimes is, with about as much validity (i.e.: somewhere between a little and a lot).

How does Herbalife differ from Amway or Cutco or any other direct-marketing company? Snake-oil seems to be the modus-operandi of that marketing channel. I mean, if you're going to talk about the suspicious benefits of herbal health supplements, let's look at the beauty-product industry too.

I think that demanding that people look at every wrong thing at once mainly acts to reduce the amount of effective action against wrongness.

The team includes lobbying firms run by two former members of Congress: Toby Moffett, a Democrat who once represented Connecticut, and Robert S. Walker, a Republican from Pennsylvania. Mr. Ackman also hired firms run by former top White House aides for President Obama and President Clinton. Jim Papa, who handled legislative affairs for the Obama White House, also joined the effort, with his firm, Global Strategy Group, a longtime consultant to Mr. Ackman.

Reading stuff like this really gets me sick to my stomach.

I don't care much for Herbalife, but people like this disgust me, covering up a naked profit grab with an air of concern for others. Pathetic. Do it without making a profit and I might listen or even agree with you. Do it for the money and it's clear you don't care a whit what happens as long as your profit is assured. But historically wealthy business people have always convinced, conned or even bribed people (you can bribe people without money) to get what they want. Think late 19th century "robber barons". It's nothing new today, except lobbying is even easier since it's also a big business today. Not a big fan of Icahn either, he bets on companies and then uses any means necessary to force the company to do what he wants in order to profit. The spirit of Rockefeller lives on.

To play devil's advocate... maybe shorting stocks is actually a sensible way to fund activism against unethical companies. It's not unprecedented. The "No win no fee" structure common in class action lawsuits is roughly equivalent.

If someone wanted to actually put this into practice, the thing to do would be to create a fund and identify several companies doing illegal things, short the stocks, and then launch campaigns against them.

I'm not sure if the math works out though. With traditional VC your wins are orders of magnitude larger than your losses, which is what allows the portfolio to succeed. I don't know enough about shorts to know whether a similar structure could be created.

Acman's behavior is not bad because he's shorting Herbalife.

It's bad because after he bought short position, he's using his money and influence to crash Herbalife, by any means necessary, buying fake concern from various "community" groups, trying to influence government officials to start investigation etc.

Metaphorically speaking, he's a corporate terrorist, trying to cause distress in a company in order to profit from it.

And let's be clear: he doesn't care what happens after (potentially temporary) drop in Heralife's stock price.

He's end-game is not fixing Herbalife via some government action, all he needs to make his billions is temporary drop in stock price caused by FUD that an investigation would create.

> Do it without making a profit and I might listen or even agree with you. Do it for the money and it's clear you don't care a whit what happens as long as your profit is assured.

Do you hold the plaintiff's bar to the same standard?

I like how the top comment is a rant about Ackman that offers no insight about the linked article.

>Do it without making a profit and I might listen or even agree with you.

lol? Instead of being concerned about the possibility that Herbalife is a scam that preys on those on the lower end of the socioeconomic spectrum, your primary point of contention is that someone stands to make money off exposing it.

I also like the completely off-the-mark "robber barons" reference, despite the fact that neither of the two parties (Ackman, Herbalife) fit the description. The week has just started and you're already venting online!

> Do it without making a profit and I might listen or even agree with you.

Isn't it basic market economics, though? If you don't make crusading against the bad guys profitable, people won't do it.

Lots of idealistic people and non-profit organizations crusade against the bad guys without the need to make a massive profit.

The ineffectiveness of such organizations, as a class, is legendary.

Ackman has said he will donate any money he personally makes from this.

The information you're missing is the timeline:

1. Ackman shorted Herbalmagic.

2. Ackman lobbied against herbalmagic.

3. Lobbying failed, and Ackman has now accumulated 500 millions in paper loss.

4. Ackman announces that he will give any profit to charity.

Pretty easy to give away non-existing profit. (Also, his donation would obviously not include any profit his firm and clients would make off the bet.)

Except you completely missed the point where Ackman isn't making any money off this.

> Mr. Ackman has said he will donate any profits he personally earns to charity, calling it “blood money.”

And that's ignoring the fact that we live in a capitalist society. You need money to get things done. If no one stood to make a profit from this the effort wouldn't be nearly as well run. This is the market working at its best (at least in principle), rewarding people who put in lots of effort to reveal information that benefits the public.

He runs a hedge fund. He gets 2 and 20. That 2 means that his company gets 2% of invested money every year as a fee. He may not make money immediately from his actions but if his investors are happy then he will make money the following year.

"""Do it for the money and it's clear you don't care a whit what happens as long as your profit is assured."""

Maybe I'm misunderstanding capitalism but if you "do it for the money" it's actually quite likely that you care a lot more about what is happening.

And as others have stated he will give away the profits (he'll still care quite a lot because the losses will hurt). He'll still come out a winner because this is excellent PR for his investment firm if he wins the bet somewhat similar to the lost Rockefeller bid.

I actually think the idea of shorting a company as motivation to get things done is quite fascinating. It hadn't really occurred to me as an instrument for public change before reading up on this.

[the methods employed seem somewhat questionable but I'm sure the other side employs similar methods...but then again I'd be interested to see some cold war scenarios play out publicly where two investment companies battle over sink/raise of some other companies stock price by employing the dirtiest tactics possible...mostly to make sure those tactics get removed as options. For example I think it would be hilarious if some other investment firm went long on HL and lobbying with more lobbying thus returning to the status quo of HL lobbying. Yeah sometimes I'm sick and twisted like that]

Whenever big money is at play, there are bound to be players that will try to influence the market on either side of the trade, so I'm not sure why the NYT reporters are being so one sided in their coverage. One of the other big players on the other side of this trade is Carl Icahn (who owns nearly 15% of the stock) so there is pretty much equal influence if not more to negate whatever Bill Ackman can do. Other investors on the other side of Ackman include George Soros as well as William Stiritz, the CEO of Post Holdings, maker of Raisin Bran.

What I would like to add though is that Bill Ackman is extremely thorough before going all out on a bet of such proportions. If he wasn't he wouldn't be in the business any longer than average Joe. Bill Ackman has acknowledged losing $400 million to $500 million on his short position, and I really don't think he is stupid enough to want to lose more money just to stroke his ego.

Here is one thing that the author states in the article:

Mr. Ackman once made a similar bet against the bond insurer MBIA, one that reaped him and his investors a $1.1 billion return. In a book about his MBIA wager called “Confidence Game,” the reporter-turned-financial analyst Christine S. Richard chronicled how he fought with regulators for SEVEN YEARS before his prediction that MBIA stock would “spiral downward” came true.

What this fails to take into state is that if the regulators had been more diligent in following up, they could have helped reign in the massive toxic CDO empire that companies like MBIA enabled that nearly tanked the global economy a couple of years ago. Also MBIA did everything it could to malign Ackman's reputation. He was under investigation for more than a couple of years where he tried to convince the "rating agencies" Moodys, Fitch and the like and the regulators about all that was wrong with MBIA and other such companies. Confidence Game is a good book worth reading to understand how dumb the regulators and rating agencies can be.

So ultimately Ackman probably knows more about this than the reporter or the regulators because he binges on tons of information and is pissed that no one is doing anything about it. Similarly to what happened with MBIA. I'd say that he is going to this extent because he is beyond frustrated that others can't see what he can see and he is trying to get others to do the research, and do what is right. He has stated that he will stick to this as long as it takes and so if there is an investigation, and they (Herbalife) come out clean, it'd still be a losing bet for Ackman as he is mainly concentrating his $$ into this trade.

If I had to put my money, I'd put it with Ackman, unfortunately I'm still grappling with my student debt to be able to afford making these kinds of bets.

In the grand scheme of things, I think Bill Ackman is more like David than Goliath. Sure he has a couple of billion in the bank, but investors like him are why corporate executives aren't partying like they used to in the 50s/60s/70s/80s and are becoming more accountable to shareholders (albeit very slowly).

I'd go so far as to say that if Paul Graham was in the business of funding hedge fund managers, Ackman would be one of his top picks from the applicant pool.

Also to add more context:

Ackman outspent by Herbalife in lobbying battle [1]

Hedge fund manager William Ackman, who is betting $1.16 billion that Herbalife is a fraud, spent $264,000 last year on lobbyists to press his case against the company, according to government documents filed in recent weeks.

THAT AMOUNT IS DWARFED BY THE NEARLY $2 million Herbalife spent in 2013 on federal lobbying as the nutrition and weight loss company fought the billionaire investor's claims it runs a pyramid scheme. In an illegal pyramid scheme members earn more for recruiting new members into the scheme than for selling the products outside the network.

And Ackman isn't alone in thinking that Herbalife is a pyramid scheme [2].

Disclaimer: This is my opinion, and as such all I know about Ackman is from the press, reading his report/book called "Is MBIA Triple A?", the book mentioned in the article "Confidence Game", his talks/interviews/tv reports and second hand articles on the web.

[1] http://www.reuters.com/article/2014/03/09/us-herbalife-idUSB... [2] http://en.wikipedia.org/wiki/Herbalife#Pyramid_scheme_allega...

It's quite an interesting battle. There's a lot of personal hate between Ackman and Icahn. While I think Ackman is on the side of good I'm not sure he'll win.

I agree that the article is disappointingly one-sided. Both sides of this case highlight a lot of things that are going wrong with the country. Corporations are more important than people and if you have money you get to live by a different set of rules.

Bill is smart. He saw that Wendy's had a division that was taking off (Tim Horton). A successful division can bring a lot of money into a company to offset other struggling divisions, and provide fuel for further growth. Bill invested in Wendy's, go them to spin off the division, getting bill a huge win in the IPO, and then he dumped the Wendy's stock.

He is a new breed of corporate raider who wants to take as much money from a company and then bail.

Bribing politicians to try and force a stock to collapse is market manipulation and is illegal. If any of the hedge funds he told about the non-public letter affecting a public company acted on that knowledge then that is insider trading and illegal. Trying to convince other hedge funds to bet against a stock could also be seen as a market manipulation (Since if the other hedge fudges take positions against the price would drop).

If I were to open a betting pool in vegas on what hedge funds were going to be shut down and the partners put in prison, and then bribed the SEC to investigate to make sure I win am I in the wrong? Or am I just a savvy investor?

> Bribing politicians to try and force a stock to collapse is market manipulation and is illegal.

I really don't want to get into a flame war, but can you please explain where you got the impression that politicians were bribed by Ackman? Lobbying != Bribing.

> If I were to open a betting pool in vegas on what hedge funds were going to be shut down and the partners put in prison, and then bribed the SEC to investigate to make sure I win am I in the wrong?

Firstly I'm not really sure whether you are being serious, because the SEC isn't an organization that you can just "BRIBE". I'm not talking about the past but the current day, and nothing remotely suggests that you can bribe the SEC. Believe me with the amount of money at play, bad actors in the SEC would be soon found out. Besides it is more lucrative for lawyers/accountants of the SEC to join the dark side (corporate law & accounting firms) instead of accepting bribes while at the SEC.

You have the right to state / make your complaints to the SEC (with evidence) and it is up to them to investigate whatever they deem investigation worthy.

Also, I feel that that talking about Wendy's or attacking Ackman's profession adds nothing to this discussion. Dumping stock is quite similar to early engineers of a IPO'ed startup cashing out. That is what you (mostly) do when you want to capture the upside of your position; you close it down when the upside is still there.

If any of the hedge funds he told about the non-public letter affecting a public company acted on that knowledge then that is insider trading and illegal.

Insider trading is when a person inside the company releases nonpublic information to people who trade on the basis of that information.

Are you asserting that Ackman is an Herbalife insider?

It also includes government employees who learn of the information through their role in the government.

Anything that people trade on that is "material" non-public information is covered

SEC Website https://www.sec.gov/answers/insider.htm

That is absolutely not true. Any person can be guilty of breaking insider trading rules. In this case, Ackman, the person who shared the information with Ackman, and any of the hedge funds which acted on that information could all be liable.

Why do you believe an insider shared information with Ackman?

The argument of the journalist would be that they do not report on trains that run on time: having an investor support the business he believes in, and would like regulation to reflect that seems par for the course -- just like having business people grant campaign funds for politicians they support.

On the other hand, the idea of having large and influential actors interested in the failure of an endeavor seems shocking and worth covering. It does lack a mention on the interests at stake, but I understand the angle on (nascent?) negativity in business.

>I'd go so far as to say that if Paul Graham was in the business of funding hedge fund managers, Ackman would be one of his top picks from the applicant pool.

You lost me here.

Also, investing with Ackman is a terrible idea. His presentations are convincing and I agree that Herbalife's business model looks shady at best but I don't see things changing anytime soon.

> I really don't think he is stupid enough to want to lose more money just to stroke his ego.

At the risk of a cliche, it really isn't about money any more. When Icahn gets involved and we get to witness the CNBC equivalent of a schoolyard brawl on live tv, it's not about what's best for their investors.

This seems like a good balancing act. The levers of power are already available for crooks trying to prop up billion dollar empires. Why shouldn't they be available for those who are trying to expose the crooks and take them down?

People in every sphere of activity (business, etc.) will find every way to exploit the government (and thus other people), and do so.

Two options:

(1) End independent spheres of activity

(2) Fix the exploits

Option #1 is an authoritarian state, option #2 is a state that recognizes individual rights (i.e. non-aggression) in principle on every issue.

The problem is there are already alot of rules setup to help the little guy from getting taken advantage of. goverenment required return policies. multiple states require you to register your business opportunity. rules aaginst front end loading. When Amway got sued the industry cleaned up it's act alot. Also, alot of ditributors are people that buy the product at "wholesale" or a more reasonable price. Now why you think your going to make lots of money selling something everyone else is selling flappy bird knock offs I'm talking to you.

My problem with Ackerman's actions is he's not only going after the bad actors (as he's perceived them) but will cause a ton of collateral damage (Herbalife shareholders).

And on top of that nonsense, thanks to the carried interest tax loophole, Ackerman will pay very low taxes on his shenanigans.

http://en.wikipedia.org/wiki/Carried_interest#Taxation_of_ca...

Herbalife shareholders are people trying to profit from a predatory pyramid scheme. How are they not bad actors?

Apparently having _no liability_ is no longer enough and we need to call stock holders victims.

First they came for the Herbalife shareholders, and I didn't speak up because I wasn't an Herbalife shareholder.

He’s happy to sell their shares to others. He just wants to do so at a price that’s reduced from now.

He has no problem enabling and assisting the bad actors, just in a way that benefits himself.

> He’s happy to sell their shares to others. He just wants to do so at a price that’s reduced from now.

You misunderstand how a short sale works. The intention is to buy at a lower price at a later date, not sell at a lower price at a later date.

Yes, the way our financial markets work, speculators on both sides must provide liquidity to the markets. However, presumably the net effect of his short selling (and any synthetic short positions he has acquired) is to reduce the stock price, thus reducing profits of Herbalife executives and those who have helped Herbalife raise operating capital by investing in the company in the past.

Now, if your contention (edit: "contention is") that selling Herbalife at a low price is an amoral act, that doesn't necessarily mean the converse (buying at a low price) is a moral act. I'm just saying your argument begins with a false premise: that his intention is to sell Herbalife shares at prices below current market price.

Also, it's possible for an action to be amoral and its opposite to simultaneously be amoral, but that's a difficult argument to construct well in general. Having argued that it's amoral for him to sell at a lower price in the future, it's difficult to construct an argument that it's amoral for him to buy at a lower price in the future without contradicting your earlier arguments.

Edit: s/amoral/imoral/g

You're assuming Herbalife is a pyramid scheme. To date, there is no definitive proof either way. But at this point, it seems more likely (given the stock price response) that Herbalife is not a pyramid scheme.

So Ackman punished Herbalife shareholders with unnecessary volatility through his actions.

http://finance.yahoo.com/echarts?s=HLF+Interactive#symbol=hl...

Yes, I find the arguments that Herbalife is a pyramid scheme very compelling, even though the case hasn't been made beyond the shadow of a doubt.

Most of the product is purchased not by end-user consumers, but by vulnerable sales people who have been sold on false hope.

tphyahoo: you are shadowbanned.

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