When the Wolves Bite
Page 25
30. Office of Massachusetts Senator Edward J. Markey, Official Press Release.
31. Stuart Pfeifer, “US Senator Calls for Investigation of Herbalife; Shares Tumble,” Los Angeles Times, January 23, 2014.
32. William Alden, “A Year Later, Ackman Sticks with His Bet Against Herbalife,” New York Times, February 13, 2014.
33. CNBC, Power Lunch, March 12, 2014.
34. Nathan Vardi, “FTC Launches Herbalife Inquiry, Shares Fall,” Forbes, March 12, 2014.
Chapter 12: The Death Blow
1. Dan McCrum and Kara Scannell, “Criminal Probe Launched into Herbalife,” Financial Times, April 11, 2014.
2. Stuart Pfeifer and Richard A. Serrano, “Federal Investigation Target L.A. -based Herbalife,” Los Angeles Times, April 11, 2014.
3. Emily Flitter and Svea Herbst-Bayliss, “FBI Conducting a Probe into Herbalife: Sources,” Reuters, April 11, 2014.
4. CNBC and Institutional Investor, Delivering Alpha, The Pierre Hotel, July 16, 2016.
5. Matthew Goldstein and Alexandra Stevenson, “Icahn and Ackman Publicly End Feud with an Embrace,” New York Times, July 16, 2016.
6. Julia LaRoche, “Bill Ackman Is About to Unveil the Most Important Presentation of His Career,” Business Insider, July 21, 2014.
7. CNBC, Fast Money: Halftime Report, July 21, 2014.
8. Betting on Zero, Zipper Brother’s Films, Gunpowder & Sky, Ted Braun, 2016.
9. Ibid.
10. Ibid.
11. Ibid.
12. CNBC, Squawk on the Street, July 21, 2014.
13. Ibid.
14. Betting on Zero.
15. Ibid.
16. Ibid.
17. Ibid.
18. Ibid.
19. Max Nisen, “Bill Ackman Just Enriched a Man He Loathes with His Failed Herbalife ‘Death Blow,’” Quartz, July 23, 2014.
20. Betting on Zero.
21. Jonathan Berr, “Herbalife Wins a Round Against Bill Ackman,” CBS Money Watch, July 22, 2014.
22. Herbalife Earnings Call Transcript, July 28, 2014.
23. Herbalife Earnings Call Transcript, November 4, 2014.
24. Ibid.
25. Ibid.
26. Ibid.
27. Letter to Investors, Pershing Square Capital Management, November 25, 2014.
28. Ibid.
29. Top 20 Hedge Funds, LCH Investments.
30. Svea Herbst-Bayliss, “Exclusive: Ackman’s Pershing Square Makes $3.3 Billion Bet on Valeant,” Reuters, March 9, 2015.
Chapter 13: The Year That Wasn’t
1. Nathan Vardi, “Bill Ackman Wins 2014,” Forbes, November 17, 2014.
2. Jordan Walthen, “Bill Ackman, Pershing Square Deliver Legendary Performance,” USA Today, October 4, 2015.
3. Christopher M. Matthews, “Prosecutors Interview People Tied to Ackman in Probe on Potential Herbalife Manipulation,” Wall Street Journal, March 12, 2015.
4. CNBC, Fast Money: Halftime Report, March 13, 2015.
5. Michelle Celarier, “Herbalife Hires New Crisis PR Firm to Fight Ackman,” New York Post, January 8, 2015.
6. Matthew J. Belvedere, “Bill Ackman: I Haven’t Traded Around Herbalife Short,” CNBC.com, March 13, 2015, www.cnbc.com/2015/03/13/bill-ackman-no-fbi-doj-contact-over-herbalife.html.
7. David M. Levitt and Oshrat Carmiel, “Ackman Group Pays $91.5 Million for Condo at NYC’s One57,” Bloomberg, April 10, 2015.
8. Ibid.
9. Alexandra Stevenson, “Bill Ackman and His Hedge Fund, Betting Big,” New York Times, October 25, 2014.
10. Svea Herbst-Bayliss, “Exclusive: Ackman’s Pershing Square Makes $3.3 Billion Bet on Valeant,” Reuters, March 9, 2015.
11. Nathan Vardi, “Bill Ackman Outs Valeant CEO Mike Pearson as a Billionaire,” Fortune, April 22, 2014.
12. Devin Leonard and Caroline Chen, “Valeant’s Boss Is Back: Can the CEO Save the Day, Again?” Bloomberg, March 3, 2016.
13. Allergan News Release, “Allergan Files Lawsuit in Federal Court Against Valeant and Pershing Square for Violations of Federal Securities Laws,” August 1, 2014.
14. Investment Master Class, “Lessons from Valeant,” April 8, 2017.
15. William D. Cohan, “In Allergan Bid, a Question of Insider Trading,” New York Times, April 23, 2014.
16. CNBC, Squawk Box, April 23, 2014.
17. Cohan, “In Allergan Bid.”
18. CNBC, Halftime Report, July 21, 2014.
19. CNBC, Squawk Box, June 9, 2014.
20. Ed Hammond, Scott Deveau, and Doni Bloomfield, “Drugmaker Valeant to Buy Salix in Deal Worth About $14.5 Billion,” February 22, 2015.
21. CNBC, Squawk on the Street, February 24, 2015.
22. Jen Wieczner, “Bill Ackman: Valeant Could Be the Next Berkshire Hathaway,” Fortune, May 4, 2015.
23. Gretchen Morgenson and Geraldine Fabrikant, “Hedge Fund Titan’s Surefire Bet Turns into a $4 Billion Loss,” New York Times, March 19, 2017.
24. Andrew Pollack and Sabrina Tavernise, “Valeant’s Drug Price Strategy Enriches It, but Infuriates Patients and Lawmakers,” New York Times, October 4, 2015.
25. Roberth Langreth and Drew Armstrong, “Clinton’s Tweet on High Drug Prices Sends Biotech Stocks Down,” Bloomberg, September 21, 2015.
26. Pollack and Tavernise, “Valeant’s Drug Price Strategy Enriches It.”
27. Jennifer Ablan, “Valeant’s Crisis Fuels Feud Between Ackman and Australian Fund Manager Hempton,” Reuters, November 3, 2015.
28. Roddy Boyd, “The King’s Gambit: Valeant’s Big Secret,” Southern Investigative Reporting Foundation, October 19, 2015.
29. Andrew Pollack, “Drug Makers Sidestep Barriers on Pricing,” New York Times, October 19, 2015.
30. Daniel Bases, Ryan Vlastelica, Claire Baldwin, and Mark Bendeich, “Special Report: The ‘Shorts’ Who Popped a China Bubble,” Reuters, August 5, 2011.
31. Citron Research, “Valeant: Could This Be the Pharmaceutical Enron?,” October 21, 2015.
32. Myles Udland, “Pharma-Giant Valeant Accused of Fraud, Denies It—Stock Still Craters,” Business Insider, October 21, 2015.
33. Antoine Gara, “Valeant Plunges 30% After Short-Seller Citron Research Makes Fraud Allegation,” Forbes, October 21, 2015.
34. Udland, “Pharma-Giant Valeant Accused of Fraud.”
35. Jonathan D. Rockoff and Jeanne Whalen, “Valeant and Pharmacy More Intertwined Than Thought,” Wall Street Journal, October 25, 2015.
36. Monica Langley, “Activist Investor Bill Ackman Plays Defense,” Wall Street Journal, November 4, 2015.
37. Ibid.
38. Ibid.
39. Ibid.
40. Ibid.
41. Reuters Staff, “Valeant Severs Ties with Controversial Pharmacy Distributor,” October 30, 2015.
42. Julia La Roche, “Bill Ackman Just Spent 4 Hours Defending His Giant Position in Valeant,” Business Insider, October 30, 2015.
43. “CNBC Excerpts: CNBC Exclusive: ValueAct CEO Jeffrey Ubben Speaks with CNBC’s Kelly Evans on ‘Closing Bell,’ Today,” CNBC.com, March 14, 2016.
44. “Herbalife Issues Statement Regarding Bill Ackman’s Presentation,” Business Wire, October 30, 2015.
45. Gibson Dunn Letter, “Suspicious Trading in Herbalife (HLF) Puts in Advance of June 25, 2015 New York Post Article,” July 20, 2015.
46. Ben Walsh, “Someone Made a Suspiciously Timed Bet That Herbalife Stock Would Plummet,” Huffington Post, October 16, 2015.
47. Gibson Dunn Letter, “Suspicious Trading.”
48. Ed Hammond, “Valeant Hits a Two-Year Low After Ackman’s Presentation,” Bloomberg, October 30, 2015.
49. Michelle Celarier, “Bill Ackman and Michael Pearson: The Inside Story,” Fortune, March 27, 2016.
50. Ibid.
51. Michael Johnson, “Market Manipulation by Hedge Fund Short Seller William Ackman,” personal letter in author’s possession, November 12, 2015.
52. Ibid.
53. Svea Herbst-Bayliss, “Ackman Tells
Investors That This Year Could Be His Firm’s Worst Ever,” Reuters, December 16, 2015.
54. Nathan Vardi, “Billionaire Bill Ackman’s Pershing Square Hedge Fund Is Down 19% in 2015,” Forbes, November 2, 2015.
55. Reuters Staff, “Bill Ackman Says His Fund Is Having Its Worst Year Ever,” Fortune, December 16, 2015.
56. Federal Trade Commission Press Release, “FTC Acts to Halt Vemma as Alleged Pyramid Scheme,” August 26, 2015.
57. Pershing Square Capital Management Letter to Investors, December 15, 2015.
58. Reuters, “Icahn Takes Stake in Cheniere Energy, Seeks Board Seat,” August 6, 2015.
59. Maureen Farrell, “Apple Stock Plunges 12%,” CNN Money, January 24, 2013.
60. Ibid.
61. Adrian Covert, “Apple Shares Soar on Increased Buyback,” CNN Tech, April 24, 2014.
62. Jennifer Booton, “Apple Spent $56 Billion on Buybacks in 2014,” MarketWatch, December 26, 2014.
63. Stephanie Yang, CNBC’s Trading Nation, December 21, 2015.
Chapter 14: The Flush and the Feds
1. Ackman email to FTC Chairwoman Ramirez, obtained through FOIA Request to Federal Trade Commission. Information delivered on February 23, 2017.
2. Roger Parloff, “Herbalife in Talks with FTC to Resolve Probe,” Fortune, February 25, 2016.
3. FTC Complaint, Case Number 2:16-cv-05217
4. Ibid.
5. Ibid.
6. Ibid.
7. Ibid.
8. Ibid.
9. Ibid.
10. CNBC, Fast Money: Halftime Report, March 1, 2016.
11. Linda A. Johnson, “Valeant’s Stock Loses Half Its Value,” US News and World Report, March 15, 2016.
12. Letter to Investors, Pershing Square Capital Management, March 15, 2016.
13. Jen Wieczner, “Valeant CEO Promises Company Won’t Go Bankrupt in Staff Memo,” Fortune, March 18, 2016.
14. Letter to Investors, Pershing Square Capital Management, May 11, 2016.
15. CNBC, Fast Money: Halftime Report, May 2, 2016.
16. Matthew Townsend, “Herbalife Soars After Saying It’s Close to FTC Resolution,” Bloomberg, May 5, 2016.
17. Ibid.
18. Ackman email to FTC Chairwoman Ramirez, obtained through FOIA Request to FTC, May 24, 2016.
19. Ibid.
20. Ibid.
21. Ibid.
22. Ibid.
23. FTC Official Press Release Announcing Herbalife Settlement, July 15, 2016.
24. Ibid.
25. Herbalife Statement, “Herbalife and the Federal Trade Commission Reach Settlement Agreement,” July 15, 2016.
26. Kevin McCoy and Nathan Bomey, “Herbalife Agrees to $200M FTC Settlement,” USA Today, July 15, 2016.
27. Carl Icahn, “Carl Icahn Issues Statement in Response to Herbalife’s Settlement with the FTC,” carlicahn.com, July 15, 2016.
28. Lindsay Rittenhouse, “Herbalife Settlement Is Profound Victory,” The Street, July 15, 2016.
Chapter 15: Finale or Fakeout?
1. Michelle Celarier, “Inside Wall Street’s Greatest Feud,” Fortune, September 19, 2016.
2. Ibid.
3. Ibid.
4. David Benoit, “Carl Icahn Mulled Selling Herbalife Stake to Group That Included Bill Ackman,” Wall Street Journal, August 26, 2016.
5. CNBC, Squawk Box, August 26, 2016.
6. Carl Icahn, “Carl Icahn Issues Statement Regarding Herbalife,” carlicahn.com, August 26, 2016.
7. Letter to Investors, Pershing Square Capital Management, December 7, 2016.
Coda: Big Thoughts
1. Alon Brav, Wei Jiang, and Hyunseob Kim, “The Real Effects of Hedge Fund Activism: Productivity, Asset Allocation, and Industry Concentration,” Abstract, p 1.
INDEX
AB Electrolux, 120
Ackman, William A., 1, 2, 10–11, 14–15, 16, 17–18, 21, 22, 31, 64, 69, 70–71, 72–74, 78, 87–88, 96, 98, 99, 100, 111, 130, 134–135, 137, 141–165, 171, 181–182, 189, 199, 201–202
assets under management, 165, 210
at AXA Center in 2014, 160–162
characterized, 17, 22, 23, 24, 25, 75 (see also Ackman, William A.: psychological profile of)
consumer groups contacted by, 142–143
at Delivering Alpha conferences, 157, 208
deposition in May 2003, 32–33
email to Pearson, 179
emails to FTC Chairwoman, 189–190, 196–197
father of, 23, 24, 25, 26, 161
first stock purchase of, 27
and FTC settlement, 199, 201
and Handler, 204–205, 208
at Harbor Investment Conference, 152
at Harvard College and Business School, 25–26, 27
and Icahn, 2, 33–35, 100, 101–109, 113, 114, 147, 157–158, 205, 206, 207–208, 212, 215
and Johnson, 76–77, 162, 180, 195, 209
lawsuit against Icahn in 2004, 35
lobbying of, 141–144, 152, 153
and Loeb, 88–89, 90, 91
modified position on Herbalife, 215
money made for investors by, 165
money spent on Herbalife campaign, 168
psychological profile of, 5–9 (see also Ackman, William A.: characterized)
public persona of, 8
restructuring Herbalife short position, 148–149
at Robin Hood Investment Conference, 149–150
sister Jeanne, 25
at Sohn special event in 2012, 78–80, 81, 83, 89
statement to author about Hallwood issue, 102
taking Pershing Square public, 180
and Valeant, 174–175, 178, 210
visit to FTC headquarters, 142
worst investment of, 40
See also Pershing Square Capital Management
Ackman-Ziff real-estate brokerage firm, 24
Actavis, 170
activists. See consumer activists; shareholder activists
Albright, Madeleine, 148
Alexander’s department store chain, 27
Allen, Claudia, 38
Allergan company, 169
Allied Capital, 62–63
Allied Financial, 58
American Airlines, 124
American Car and Foundry, 121–122
Amway, 44, 59, 66
Andry, Doran, 20, 79–80
AOL, 127
Apple, 1, 39, 184–188
buyback of Icahn’s stock, 184, 185, 186–188
arbitrage, game of, 118, 119
Auletta, Ken, 115
Automatic Data Processing Inc., 215
AXA Center on Seventh Avenue, 76, 78, 89, 111, 158, 159–162
Bank of England, 134, 139
bankruptcy, 10, 16, 27, 29, 31, 63, 125, 126
of Lehman Brothers, 64
Barbarians at the Gate, The, 126
Barnes and Noble, 37, 70
Bartz, Carol, 92
Bausch and Lomb, 169
BBC, 162
Bear Stearns, 11
Beckham, David, 53
Benoit, David, 197
Berkowitz, David, 27–29, 31, 33
Berkshire Hathaway, 171
Big Short, The (Lewis), 12
Biogen, 128
Boesky, Ivan F., 121, 125–126
Boies, Schiller firm, 97, 176
Borders Group, 70–71
Boston Market restaurant chain, 62
Botox, 169
Boyd, Roddy, 173
Brazil, 58
Brussels, Belgium, 19, 54
Buffett, Susan, 27
Buffett, Warren, 26, 27, 129, 171, 211
BurnLounge company, 14
Business Insider, 103, 109, 147
BuzzFeed News, 213
Calderon, José, 143
Canadian Pacific railway, 71, 72, 209
Carlisle, Tobias, 119
Carmona, Dr. Richard H., 148
Celarier, Michelle, 138–139
celebrity, 7, 9
Cha
nos, James, 170–171
Chapman, Brett, 57
Chapman, Robert, 84–86, 87, 89–90, 100, 150
Chapman Capital, 84
Chappaqua, New York, 22–23
Cheniere Energy, 183–184
Chesapeake Energy, 183
Chesebrough-Ponds Inc., 122
Chipotle chain, 209
Christodoro, Jonathan, 111, 112
Chung, Juliet, 100
Circa Pharmaceuticals, 28
Citron Research, 174
Clinton, Hillary, 172, 193
Clorox, 128
CNBC, 40, 55, 59, 60, 76, 77–78, 81, 85, 88, 154, 159, 176, 215
Delivering Alpha conferences, 147, 156–158, 208
Halftime Report, 101, 103–105, 109, 158
Squawk Box, 97, 170, 197, 206
Cohen, Steven A., 111
commodity prices, 183
Confidence Game: How a Hedge Fund Manager Called Wall Street’s Bluff (Richard), 12
consumer activists, 146
Cook, Tim, 184–188
corporate raiders, 121
Corvex Management LP, 113
Covington & Burling law firm, 32
Cozza, Keith, 207
Cramer, Jim, 55
credit default swaps, 10
credit ratings, 10, 11, 31
D.A. Davidson firm, 83, 132
Day, Andra, 211
debt, 3, 30, 64, 70, 124, 125, 170, 176, 209
Deep Value (Carlisle), 119
De La Merced, Michael, 60–61, 96
Denis, Mo, 145
derivatives market, 117, 149
DeSimone, John, 8, 57, 61, 66, 96, 159–160, 196, 207
Dewey Square Group, 145
Dietz, Dr. Park, 6–7
Dinan, Jamie, 37
Dinneen, Shane, 15–16, 19–20, 21–22, 72, 74, 76, 78, 80–81, 142
Disney. See Walt Disney International
dollars, 163
Dow Jones Industrial Average, 119
Dream US, 190
Drexel firm, 126
Druckenmiller, Stanley, 134
Dunton, Gary C., 11
DuPont, 1
Durst family 28
Ebbers, Bernard J., 62
Edelman, Asher, 113
Einhorn, David, 37, 58–66, 67–69, 72, 73–74, 201
out of Herbalife, 69
Eisman, Steven, 12
Eisner, Michael, 52
EM-Tech Co., 137
energy-drink makers, 141
Enron, 170, 174, 176
European Exchange Rate Mechanism (ERM), 134
Faber, David, 171
FactSet, 188
FBI, 132, 155, 167, 180
FC Barcelona, 53
Federal Reserve, 156