"Maybe I didn't do a good job," Bill Ackman said, toward the end of his more than three-hour-long Herbalife (NYSE:HLF) presentation on Tuesday. With Herbalife shares surging more than 25% during the session, even as the founder of hedge fund Pershing Square attempted to deliver the "deathblow" to the multilevel marketer, his self-assessment appeared accurate.
Perhaps it was his aggressive promotional push, Wall Street traders' short attention spans, or the drawn-out nature of his presentation, but Herbalife shares shrugged off Ackman's attacks.
Yet there was significant substance to Ackman's presentation. This time, Ackman took aim at Herbalife's Nutrition Clubs -- quasi-distribution centers that have accounted for much of the company's growth in recent years, and generate much of its revenue. While Ackman, and his fund Pershing Square, insist that Herbalife as a whole is a pyramid scheme, they believe that Herbalife Nutrition Clubs operate as mini pyramids within it -- a pyramid scheme propping up a larger pyramid scheme.
While interested investors should probably take the time to watch Ackman's presentation in full, the following slide show summarizes his major points.