Billionaire activist Bill Ackman is not cutting his hedge fund's losses in a massive short bet against Herbalife (HLF). In fact, he stepped on the gas this week with a new video series once again portraying Herbalife as a so-called pyramid scheme.
Ackman first made public a $1 billion short position taken by his hedge fund, Pershing Square, in December 2012, and has since been battling Herbalife over more than three years of exchanges. (Herbalife shares have more than doubled since Ackman's initial presentation.)
Herbalife, on one hand, has been calling Ackman a "Wall Street gambler" who's unfairly manipulated shares, while Ackman has been persistent in his public accusations that Herbalife is a pyramid scheme that preys on low-income U.S. Latino communities through its recruitment and compensation practices.
So far this week, Pershing has posted two videos on its site, factsaboutherbalife.com, with one today entitled "Herbalife's False and Misleading Claims Continue," noting 99% of Herbalife workers make less than minimum wage. And the company is expected to post about three more videos throughout the rest of the week, a source close to the matter told Real Money.
Tuesday's video, which argues that Herbalife Chairman's Club member Stephan Gratziani has made false promises of wealth to prospective Herbalife distributors, comes on the heels of a Monday video in which another Chairman's Club member proclaims to an audience at a Herbalife function, "I have the solution to make you rich .... Everything is possible if you decide to be a better, more successful person at this company."
The video series is not Ackman's first attempt to reinforce his allegations with online videos, after having launched the webcast, "American Dream Denied," in February, which sets so-called victims against a black backdrop and details experiences in which Herbalife distributors have fallen into unsustainable debt after following Herbalife's guidance to buy products and establish their own Herbalife retail outlets to move up the distributor chain.
Director Ted Braun also debuted a documentary, "Betting on Zero," at the Tribeca Film Festival in April, chronicling Ackman's three-year battle to take down Herbalife shares by organizing and empowering a network of dissatisfied former distributors.