Okay so maybe evil is a slightly strong description but a hedge fund manager is using Google ads to highlight his opinion that Herbalife is a scam and that people need to stop buying or selling the products. Since we’re discussing a Wall Street hedge fund manager don’t assume this is for a good cause, Bill Ackman has spent a billion dollars shorting Herbalife stock. Ackman needs the value of the stock to go down and has turned to Google to help convince people that Herbalife is a scam:
Who will win? That might come down to who does the best marketing. If Ackman is successful in convincing the world that Herbalife is a pyramid scheme, it could put pressure on regulators to step in and investigate the company.
That would certainly hurt the company’s stock, and it could even put it out of business. If Herbalife and the hedge fund managers betting on Herbalife can mount a vigorous defense to Ackman’s claims, however, Ackman could become the victim of a massive short squeeze.
In an effort to get information out, Ackman has unveiled a website, factsaboutherbalife.com, and has stated that he’s prepared to spend whatever it takes to convince the world that he’s right about Herbalife.
Some of his spend is apparently going to Google. A search for ‘Herbalife’ and related terms show AdWords ads for the factsaboutherbalife.com site.
Apparently other investors have pitched the price of the stock increasing meaning we’ve got an epic marketing battle on our hands to prove that Herbalife is/isn’t a pyramid scheme. This is unfortunately going to be a tough battle for Ackman to win.