BOSTON, March 25 Weight loss and nutrition
company Herbalife launched a website on Tuesday that
details its business practices and counters claims made by
billionaire investor William Ackman that it is running an
illegal pyramid scheme.
The website represents the latest salvo in a high-stakes
battle between Ackman and investor Carl Icahn, who has taken a
major stake in Herbalife and will soon control five seats on its
13-member board of directors.
Ackman, who runs the $12 billion hedge fund Pershing Square
Capital, announced a $1 billion short bet against Herbalife in
2012 and since then has been lobbying lawmakers and regulators
to investigate it. He claims Herbalife misleads recruits about
how much money they can make buying its products in bulk and
selling them, which Herbalife denies.
The Federal Trade Commission confirmed it opened a probe
this month, but declined to give any details.
Herbalife's site, iamherbalife.com, describes Ackman's
claims as misleading and features a link to dozens of
testimonials from users touting the company's products and how
healthy they are after taking them.
It adds that there is no guarantee of success as a
distributor, contrasting with some of its promotional videos
showing distributors riding snowmobiles and horses, talking
about their lavish lifestyles and how others can copy them.
Herbalife writes on the site that it is a "legitimate
multi-level marketing company" focused on selling its shakes and
powders to people who want to consume them. It also makes clear
that Ackman will make money if Herbalife's share price falls and
could lose money if it climbs.
The share price has fallen 32 percent since January but has
risen 41.78 percent over the last 52 weeks.
The site appears to be a direct response to Ackman's own
site, factsaboutherbalife.com, launched in 2012, which details
Ackman's claims against the company.
Herbalife said it is confident that it is in compliance with
all applicable laws and regulations. It also said it will not
comment further about the FTC probe until there are material
(Reporting by Svea Herbst-Bayliss; Editing by Richard Valdmanis
and Dan Grebler)