Activist investor Bill Ackman, who runs $12 billion Pershing Square Capital, did a Q&A with the Financial Times about his philanthropic work with the Pershing Square Foundation.
When asked about the criticism he has recieved over his short selling, Ackman said if he can bring down Herbalife it will be the “greatest achievement of his life.”
You have received a lot of good press, but there has also been some criticism of some of the investment stances you have taken and also your trading techniques, specifically the short selling. In a way, your philanthropy does not seem to fit with how you live your professional life. How would you respond to that assertion?
I think we’ve accomplished more for society in our for-profit activities than in our not-for-profit activities. My work with the Foundation is a continuum of what I do in my professional life. When the Foundation sees a problem we always ask if there is a business solution. I think most of the criticisms you have heard relate to my position on Herbalife. If I manage to close down that company I will consider it the greatest achievement of my life.
Back in December, Ackman publicly announced that he’s shorting more than 20 million shares of Herbalife, a multi-level marketing company that sells nutrition products.
He believes the company is a “pyramid scheme” that targets lower income people and that the FTC will be induced to investigate it. He has a price target of $0.
Ackman has also pledged to donate 100% of personal profits made from this short to charity.
Herbalife’s stock has been the centre of a huge hedge fund clash of the titans.
Ackman’s long-time rival Carl Icahn snapped up a massive stake in Herbalife. Icahn owns more than 16 million shares of Herbalife and said he thinks Ackman will be the victim of “the mother of all short squeezes.”
Since December 18, the trading session before Ackman’s short position was confirmed, the stock has risen more than 8.2%. The stock has traded in a 52-week range of $24.24 to $56.39.
Herbalife was last down more than 4.5% today at about $43.92 a share.
Herbalife has denied Ackman’s claims.
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