Ackman knew or should have known he would receive push back from the Herbalife organization. If Herbalife is anything, it's a marketing machine of epic proportion. Herbalife's stock traveled full speed on the volatility highway once again when news broke of hedge fund manager Daniel Loeb accumulated a large bullish position.
Loeb's fund now controls more than 8% of Herbalife stock. The total amount is about $350 million, a far cry from Ackman's reported billion dollar short bet, but someone is going to walk away from this one with a black eye at the very least.
With the many big names taking a stand for and against the company, it's only a matter of time before Lions Gate Entertainment (LGF) produces a movie about the unfolding events. Ben Affleck can play Bill Ackman and George Clooney will play Daniel Loeb. Herbalife's CEO Michael Johnson can be played by Brad Pitt, and not the 12 Monkeys Brad Pitt, but the Inglorious Basterds Brad Pitt.Affleck and Clooney will bring to the silver screen all the battles waged with billions of dollars up for grabs to the winner. In the end, Clooney will ride off into the morning desert with suitcases full of cash, but it isn't his financial brilliance that wins the fight. What wins this battle is the army of committed distributors with their livelihood at stake and their backs against the wall. Herbalife is an unparalleled marketing machine that knows how to pitch a product. You don't become a $4 billion network marketing company if you don't excel at selling. Herbalife will host an analyst conference (aka sales presentation), and already has released a YouTube (GOOG) video that humanizes Herbalife with projection of the moral high ground in the fight against short sellers. In terms of emotional currency, the video accomplishes the objectives that Herbalife is a quality company, managed by caring people and they want to improve the health of their customers. Oh and yes, you can make a buck or two selling the product if you work hard at it. Here is the video: