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Ackman Frontrunning Herbalife Investigation Presentation

Jennifer Van Grove

Nutrition company Herbalife is in need of some health management of its own after accusations by hedge fund manager Bill Ackman of “incredible fraud.” The company’s stock had plummeted by more than 6 percent in Monday afternoon trading.

“You’re going to learn why Herbalife is going to collapse,” Ackman told CNBC on Monday. “This will be the most important presentation that I have made in my career.”

Ackman, CEO of Pershing Square Capital Management, has been actively campaigning against Herbalife for some time, and his firm operates the website Herbalifepyramidscheme.com. The campaign will come to a head Tuesday morning when his firm presents findings from a so-called investigation, which is said to include obtained internal documents and video, into alleged fraud related Herbalife’s Nutrition Clubs.

Ackman did not reveal specifics on the Tuesday presentation beyond reasserting that the nutrition company operates a pyramid scheme. “We won’t disappoint,” he said.

Though Ackman’s accusations are currently unsubstantiated, traders are selling off the stock as they brace themselves for bad news.

Not all are convinced that Ackman’s report will be as breakthrough as the activist investor suggests.

Meanwhile, Herbalife is attempting to run a campaign of its own and is using the hashtag #worstofwallstreet on Twitter to counter Ackman’s accusations, though the hashtag has yet to pick up momentum on the social network.

“Herbalife continues to face an unprecedented and unrelenting attack from Pershing Square to support its $1 billion bet to manipulate and drive Herbalife’s stock price to zero,” Herbalife said in a press release last week.

Herbalife is scheduled to report second-quarter earnings on July 29.

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