Saturday, May 7, 2016

If someone disagrees with you they are certifiably crazy: Bill Ackman, Valeant and Herbalife edition.

The US Senate has released a lot of Valeant documents. Link here

There is quite a deal here - but I got to this email from Bill Ackman to Mason Morfit (of ValueAct) and Mike Pearson (the then CEO of Valeant). I can't resist posting it.

Mike and Mason 
Happy Thanksgiving. 
Please see below from my PR folks. The idea that Ubben blames me for the decline in VRX stock is absurd. I don't care but I think it is not good for Valeant. 
I had never previously heard of Andrew Left and I don't think his short position was motivated by animus for me. I just think he wanted to make money. With respect to John Hempton, I have never met him or spoken to him. He happens to be long Herbalife and certifiably crazy. How can I be responsible for his behavior? 
With respect to my email apology for the WSJ article, I don't understand what value it brings Valeant for the recipients to have shared it with the FT. I did my best to shape the WSJ article in a way that would be good for Valeant and I didn't love the outcome. I therefore apologized. Isn't that the appropriate thing to do?



Bill

I just want to put this up for posterity. But I wish to assure Bill that on both stocks I am research driven and quite sane.




J

20 comments:

Highgamma said...

This is the funniest thing I've ever read that involves supposed professionals.

Anonymous said...

the whole thing is going to be made a movie

Martin said...

John, you are certifiably crazy. Does one get a certificate of insanity to prove one understands the inner workings at Valeant? I am not crazy enought, yet.

Anonymous said...

Props to you. Keeping your wits about you while Ackman was losing his was no mean feat...
Even if he sees it the other way around!

Anonymous said...

He wants to cure your certified craziness by selling you Valeant's latest $10,000 placebo pill......

Conscience of a Conservative said...

Bill Ackman told the senate committe he failed to research Valeant's drug pricing. The statement sounds incredible, but if true makes him sound sloppy in his research.

Otto ikn said...

"Happy Thanksgiving". HLF has beaten out the SP500 by 16% since that happy holiday. Crazier and crazier.

Anonymous said...

What's the diff between a hooker and ackman?
With the former, you get something for your money. With the latter, he just bleeds your nice and slow.

Anonymous said...

The other day Charlie Munger said Ackman is right about Herbalife..

The Shadow Banker said...

"Say anything you want about me as long as you spell my name right!" PT Barnum

As for Ackman vs. Hempton, Bill had his chance:

http://theshadowbanker.org/2016/01/11/letter-bill-ackman/

Mak said...

To be fair, the comment about Herbalife was in the "throwing him a bone" phase of the answer, along with being a fellow Harvard alum and calling him "articulate and intelligent". I doubt Munger has spent any time at all on HLF, otherwise he'd find a lot of similarities to his own Pampered Chef.

Simple Simon said...

John

A delicious irony - coming from Ackman.
When I think of him, the first phrase that comes to mind: "Those whom the gods wish to destroy they first make mad."

The way he handled first Herbalife, then Valeant would have dismayed The Godfather; with Ackman it's become all personal, nothing business. Can you imagine what kind of discussions are going on in the boardrooms of institutional investors in Pershing Square? He's obviously talented, maybe even gifted but in the past few years he seems to have totally lost the plot.

Keep up the good work on your blog ... and the dispassion.

Anonymous said...

Don't forget brown nosed Bill's email to Charlie Munger. http://www.businessinsider.com/bill-ackman-email-to-charlie-munger-2016-5

GlobalTrader said...

The real question is, how much has John sold of his HLF since the FTC comments last week

John Hempton said...

I have not sold any $HLF since the FTC comments.

And I think you have misinterpreted the FTC comments.

John

Anonymous said...

But the top 1% of of HLF captured 89% of all earnings in 2015.... And 85% in 2014... 86% of all members earned no compensation... How in the world is that not a pyramid scheme? I love your work John on a lot of things and have followed you into many positions but I think your wrong on this one. 89% of all earnings were captured by the top 1% of the company!!! Thats insane... You don't think?

Anonymous said...

But this is hilarious, because you are far from crazy lol, Ackman needs some help....

John Hempton said...

The comment about 89 percent of earnings going to the top 1% is also wrong.

The main earnings are your dales profits - they are fully 70 percent of all sales - and they go to bottom end distributors.

You are essentially ignoring the true nature of the comp structure.

Anonymous said...

hahahahaha!

GlobalTrader said...

"And I think you have misinterpreted the FTC comments."

Looks like you were completely and utterly wrong. the FTC WAS in fact, giving an advance warning about what they were going to do with HLF

See John, you make mistakes. You are not above analytical errors, you are biased just like any other HF manager. The FTC looked at this thing for years and concluded that the business (in the US) works as a pyramid scheme, even if they used other terms to describe it

General disclaimer

The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author.  In particular this blog is not directed for investment purposes at US Persons.