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Is Herbalife planning a campaign against critic Bill Ackman?

January 29, 2013|By Stuart Pfeifer

This just got personal.

Herbalife Ltd. has obtained the rights to domain names such as therealbillackman.com and billackman.net, a sign that the Los Angeles nutritional products company may be planning a public campaign against one of its biggest critics -- billionaire hedge fund manager Bill Ackman.

Ackman said Herbalife is worried about his assertions that it is a pyramid scheme in which distributors are paid more for recruiting new distributors than for selling its diet shakes and protein powders.

“What legitimate company would do something like that?” Ackman told Bloomberg News. “The spotlight is on Herbalife and they are doing everything they can do to turn it away.”

Herbalife did not immediately respond to a request for comment. The company’s shares fell more than 3% to $38.67 on Tuesday.

Last month, Ackman held a news conference, streamed live on the Internet, to present his case against Herbalife. He told The Times he has a $1-billion short position on Herbalife's shares.

Herbalife sells a line of nutrition and beauty products through a team of independent distributors based in more than 80 countries worldwide. As a so-called multi-level marketing company, Herbalife pays distributors both for sales they make and for sales made by distributors they have recruited.

ALSO:

CEO insists Herbalife is no pyramid scheme

Hedge fund manager alleges Herbalife is 'pyramid scheme'

Herbalife shares climb as two billionaire investors square off

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