Mr. Icahn's profitable trade came in the wake of Mr. Ackman's public accusation (December 2012) that'Herbalife' is a fraudulent and, therefore, effectively-valueless, company, coupled with Mr. Ackman's public declaration that he had, consequently, acquired a short-selling position against 'Herbalife' (on behalf of his own company, Pershing Square Capital) involving $1.2 billion.
Mr. Ackman's presentation of a detailed evidence-based analysis of the exploitative, hybrid pyramid/snake-oil selling scam which has lurked behind the reality-inverting 'Herbalife/direct selling'propaganda, initially produced a steep decline in the demonstrably-fraudulent company's artificially-inflated share value. However, the failure of US regulators to take immediate action has allowed the'Herbalife' racket to continue.
Seeing an opportunity to make easy money, during 2013, Mr. Icahn bought 16% of the 'Herbalife' racket's collapsing corporate front which he has helped artificially to re-inflate by publicly attacking Mr. Ackman's integrity whilst steadfastly pretending that all the accusations against 'Herbalife' are 'preposterous'. Tellingly, at no stage during this ongoing Wall Street saga has Mr. Icahn offered the slightest explanation as to why he believes Mr. Ackman's analysis of 'Herbalife' to be inaccurate
Self-evidently, it has been largely through Mr. Icahn's own much-publicised, but unqualified, support for the 'Herbalife' racket that he has been able to make quarter of a billion dollars. In other words, whilst federal regulators have failed to protect the public, a billionaire corporate raider has quite literally bought the power to maintain or destroy not just just the 'Herbalife' racket, but also the entire, criminogenic phenomenon of 'MLM income opportunity' racketeering. So far, apparently motivated purely by greed, Mr. Icahn has chosen to maintain it, for there is no way that he can be completely unaware of what has been lurking behind the so-called 'MLM/direct selling industry.'
David Brear (copyright 2013)