Be Wary When They Attack The Messenger

Now, I have no dogs in this fight but if I was a Herbalife ($HLF) shareholder I’d be wondering why they are doing this. Don’t they have a legit company that can stand on its own? Do they really need to be buying website names in an attempt to discredit Ackman or dish dirt on him?

Are they simply trying to change the conversation from themselves to him? Now, defenders will say “yeah but, that is what Ackman did when he registered factsaboutherbalife.com!!!”. No, it isn’t. He did not take out websites on management or board members to personally attack them, he did it about the company itself which is the topic on conversation.

Herbalife, assuming they actually do something with these sites seems to be desperately trying to alter the conversation from their business model to the “evil activist investor” boogyman The problem with that is only fools won’t see through it.

Yes, I know about Loab and Icahn but no one will ever convince me they are not in this simply for a trade, NOT an investment. They did the same thing Ackman did, use their names and reputation to give credence to a position. The difference is that Ackman is in this to the end and I’d be shocked if either Loeb or Icahn actually still owned a share after the recent run it had.

What Herbalife ought to be doing is telling investors how their business model is different that the recently shuttered Fortune MLM that was declared a ponzi by the FTC and now has 3 State AG’s moving on it. It is no coincidence $HLF’s recent share price fall and that news coincided. Their silence in this respect is truly deafening.

What are they possibly going to say about Ackman that we all have not already heard? Seriously?

“Bill Ackman had failed investments in Target and Borders”

Great, but, how are you different than the Fortune ponzi scheme?

“Bill Ackman bullies management to get what he wants”

OK, but, how are you different than the Fortune ponzi scheme?

“Bill Ackman kicks dogs when no one is looking”

Sure, um, but, how are you different than the Fortune ponzi scheme???

“Bill Ackman was the shooter in the grassy knoll”

Um, ok, well probably not….but again, how are you different than the Fortune ponzi scheme?

See, until $HLF focuses its efforts purely on the message and not simply the messenger, anything they say will be looked at skeptically, as it should. Now, the reality very well may be that they do not want the focus to be on the message and THAT is the real problem.

Now $HLF has called Ackman’s statements “defamatory” and “slander” and “libelous”. They’ve even hired David Bois to “look into the allegations”. Yet, nothing. Not even a “cease and desist” letter or ay type of warning. Why not? Ackman has said he would relish litigations as depositions under oath have a way of cutting through jargon and getting down to the truth. Maybe management know this and would rather not be deposed?

Yet, we have silence from $HLF. If Ackman is truly all the things they are going to say about him and is “colluding” which has been insinuated then why are they not being more aggressive? Anyone who has followed Ackman for more than 10min knows he is not going to let this go. He is going to go after this until he feels he gets the justifiable results. If your not sure how far he will go and what he will endure just go read “Confidence Game“. Ackman has promised a retort soon so 4HLF must know another onslaught is coming….

Why isn’t $HLF trying to head this off? There are times in which what people DON’T do is more telling than what they DO

I think this is one of those times

Herbalife Registers ’The Real Bill Ackman’ Website Name
By Matt Townsend & Duane D. Stanford – Jan 30, 2013 12:00 AM ET

Herbalife Ltd. (HLF), the nutrition company that hedge-fund manager Bill Ackman has called a pyramid scheme, has registered several domain names that include the activist investor’s name.
Domain names such as therealbillackman.com and billackman.net were acquired by Herbalife as of Jan. 18, according to www.domainsearch.com. The websites are blank.

Herbalife has been battling accusations from Ackman, founder of New York hedge fund Pershing Square Capital Management LP, that it uses inflated pricing, misleading sales information and a complicated incentive structure to hide a pyramid scheme. The company this month held an investor meeting to defend its direct-selling model and said Ackman had grossly mischaracterized its business.

Ackman quickly took issue with the Herbalife domain names.

“What legitimate company would do something like that,” he said yesterday in a telephone interview. “The spotlight is on Herbalife and they are doing everything they can do to turn it away.”

Ackman has his own website: factsaboutherbalife.com.

Barbara Henderson, a spokeswoman for Herbalife, didn’t immediately respond to a request for comment.

The debate over Herbalife has also sparked rare public disputes among high-profile investors. Last week, Ackman and investor Carl Icahn sparred on CNBC about the company and past dealings with each other. Icahn later said on Bloomberg Television that he didn’t “like” or “respect” Ackman.

Loeb Bet

Ackman’s shorting of Herbalife was countered by fellow hedge-fund manager Daniel Loeb. On Jan. 9, three weeks after Ackman disclosed his bet against Herbalife, Loeb’s Third Point LLC disclosed that its hedge funds held 8.9 million shares of Herbalife at year-end.

Herbalife’s shares have rebounded since Ackman first made his comments. They fell 3.4 percent to $38.67 yesterday in New York, up from a low of $26.06 after Ackman’s presentation.

Ackman said last month that Pershing Square is short more than 20 million shares, which was about 97 percent of the 20.7 million short interest shares outstanding at the time.