Herbalife's high profile investor war heats up

A woman is seen speaking on her cellphone beneath a Herbalife sign atop an office building in downtown Los Angeles on January 24, 2014. 

The Federal Trade Commission is investigating a company called Herbalife. It makes supplements.

Now, the FTC investigates companies all the time, so that's not such a big deal.  But that there has been a very public war going on between the company and one particular investor who has bet against it. 

That investor is a hedge fund manager named William Ackman. He bet more than a billion dollars that the stock price would fall and has been doing everything he can to... make the stock price fall. He's waged a very public campaign against Herbalife, claiming it's a pyramid scheme.

But the public hasn't paid attention: the company's stock has gone up this year. So the FTC investigation news is good news for Ackman.

When the regulators are done with their probe, we'll have more insight into the central question people have about this fight: is Ackman's campaign an unfair smear or a well-deserved takedown?

About the author

Sabri Ben-Achour is a reporter for Marketplace, based in the New York City bureau. He covers Wall Street, finance, and anything New York and money related.

Comments

I agree to American Public Media's Terms and Conditions.
With Generous Support From...