On Herbalife, Senator Markey, and Bill Ackman
January 23, 2014 Leave a comment
Massachusetts Senator Edward Markey sent letters to the SEC and FTC calling for an investigation into the company’s practices. Senator Markey also sent a letter to Herbalife’s CEO Michael Johnson requesting more details on the company’s operations and compensation system. Herbalife (“HLF”) shares declined over 10%.
Market participants (many of whom I respect) responded with disgust, saying things like: “looks like Ackman bought a politician”, “Markey get a nice donation from Ackman?”, “This is America – where a politician can be lobbied/paid to move markets instantly”
I respectfully disagree with these and similar statements, and believe they are intellectually dishonest and anti-democratic for the following reasons:
- Free speech is one of America’s gifts to the world and its citizens. Free speech is inherently American.
- Mr. Ackman (as an American) has the right, just like you and I do, to express his opinions. He has the right to express his opinions to those wielding political power.
- While it is true that Ackman has more influence than most of us do… so do the Herbalife shareholders. And the company itself. So before you complain about “unfairness”, there are 10-100 similarly influential people on Herbalife’s side that have far more power than Ackman. Oh, and what of all the many dollars that the MLM lobbies have spent lobbying Washington? Perspective matters. I would see a problem in Ackman’s actions if the other side, and other voices did not possess similar rights and clout.
- Whatever relationship(s) exist (or don’t exist) between Ackman and Markey have nothing to do with the validity/invalidity of the short thesis. Rather than bring attention to any possible relationship, why not focus on the merit of the concerns?
- Bill Ackman’s character and like-ability are irrelevant.
Quod Erat Demonstrandum.
Disclosures: I don’t count myself as a fan or foe of any of the parties discussed here, nor do I know any of them personally.
“Free speech is only free if it’s bullish” – a friend