Herbalife's stock fell more than 7 percent Monday and early Tuesday ahead of the presentation. But during and after Ackman's presentation, shares spiked by more than 25 percent, the best single day gain in the stock's history. More than 20 million shares exchanged hands by midafternoon.
"Once again, Bill Ackman has over-promised and under-delivered on his $1 billion bet against our company," Herbalife said in a statement Tuesday afternoon. "After spending $50 million, two years and tens of thousands of man-hours, Bill Ackman further demonstrated today that the facts are on our side."
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The Pershing Square Capital Management founder's presentation focused on the supplement company's nutrition clubs, which he said were "mini" versions of the multilevel marketer's broader "pyramid" scheme.
Ackman cited findings by his undercover investigators who joined Herbalife's nutrition clubs. The presentation purported to show evidence that the clubs, such as those under the "Club 100" umbrella, are designed to recruit and train additional product-selling members, as opposed to consumption of the company's shakes and other products as is suggested by Herbalife.
"This is a mini-Herbalife pyramid," Ackman said of Club 100 and its own structure of recruiting new members, especially family and friends. "They are not selling weight loss in these clubs, they are selling a business opportunity," he said.