After a ruthless five-year-long activist short campaign against Herbalife Nutrition, Bill Ackman's hedge fund Pershing Square Capital Management finally fully exited its position in the Company in February 2018. This marked the end of a short campaign that was unprecedented in terms of its scale, duration and cost, and the extent to which it played out in the public arena.
Beginning in 2012, Herbalife Nutrition mounted a comprehensive and multi-faceted defense of the Company, that supported our financial and operational performance and sustained morale, bolstered our reputation among key stakeholders, protected our brand, and ultimately lead to a resounding victory. Charlie Gasparino of Fox Business commented that "Herbalife's counterattack would be a Harvard case study" on how to deal with activists (watch it here).
While strategies and tactics in combating typical "long"activist campaigns, in which a dissident shareholder pushes for change and value creation, are well documented, the unique challenge of being the target of a short campaign is often overlooked. Short campaigns can be far more damaging than traditional activism because shorts want to destroy value at all costs and will tarnish a company's reputation to achieve that goal. That was certainly the case with our Company, and we believe our successful response could form the new playbook for such attacks.