Hedge fund manager Bill Ackerman says Herbalife is a pyramid scheme and has bet $1 billion on its fall. Hedge fund manager Dan Loeb begs to differ and has bet $350 million that the stock will rise in value.
Herbalife has a headquarters in downtown Los Angeles, is incorporated in the Cayman Islands, is run by CEO Michel Johnson, a former Disney executive, and has been in business for more than 30 years. It did $3.5 billion — yes, that's billion — in net sales in 2011, has 6,000 staff employees and three million — that's million — independent distributors worldwide.
And since late last year, it's been under assault by Bill Ackman, who runs Pershing Square Capital Management, a New York hedge fund. Just before Christmas 2012, Ackman conducted a three-hour presentation is which he worked through 343 PowerPoint slides (see it here and add to Business Insider's over three million page views for the post) and laid out the case that Herbalife is a pyramid scheme. Ackman has set a target price for the company's price of zero.
Hulu is one of those companies that stands squarely between Hollywood and Silicon Valley. CEO Jason Kilar stepped down on Friday.
Brian Stelter and Amy Chozick make the case on the New York Times' Media Decoder blog that Jason Kilar's exit from Hulu had a lot to do with the suits who own TV networks:
Mr. Kilar’s announcement did not come as a complete surprise. At times during his tenure he has clashed with the owners on Hulu, exemplifying the divide between new, disruptive modes of distribution like the Internet and the more traditional operations at major media companies. As the owners pulled back on the amount of ABC, Fox and NBC programming it provided to Hulu, the Web site invested in original, made-for-the-Web programming to fill the gaps and attract attention.
The last time it looked as if Kilar would exit Hulu, it was when Yahoo was coming off an executive scandal, with activist shareholder Dan Loeb of the hedge fund Third Point agitating for both board-level and CEO changes.
The 107-year-old Hollywood trade magazine has finally been sold, to the publisher who owns competing Deadline.com. The reported $25-million price tag has been called a "fire sale."
After months of negotiation, Variety finally sold to Jay Penske's PMC, for a reported $25 million. That is more than four times the iconic entertainment trade publication's anticipated 2012 profit of $6 million. On the one hand, Penske, a budding media mogul, adds a major name brand to his stable, which also includes Deadline and Movieline. On the other, Variety is a big-time turnaround challenge, with yearly revenues that have been chopped in half since 2006. Former owner Reed Elsevier had been interesting in getting rid of it for a while.
You have questions. We have answers.
Q: Who is Jay Penske?
A: He's the son of Roger Penske, an American auto-racing and auto-entpreneurship legend. The 33-year-old has been assembling a minor media empire under the Penske Media Corp. umbrella, including the aforementioned Hollywood/entertainment websites, as well as auto site OnCars (the apple doesn't fall far from the tree) and Engadget/Gizmodo gadget-website competitor BGR. He also owns an IndyCar racing team, Dragon Racing — and he and his brother had a little trouble with the law on Nantucket island over the summer. He became the top bidder late last month when billionaire businessman Ron Burkle and Avenue Capital, a hedge fund, both balked at the $25 million asking price.
Yahoo!'s Santa Monica location. Board member Patti Hart won't run for re-election.
Backstory: Dan Loeb, a hedge funder who runs Third Point, wants to take over a chunk of the Yahoo board, make management changes, and above all else NOT sell off Alibaba, the Asian e-commerce site that Yahoo owns 40 percent of.
The board rebuffed him, questioning his qualifications, after offering only two seats to Loeb's demand for four and saying that he couldn't have one of them. He fired back a letter revealing that Yahoo CEO Scott Thompson had misrepresented his academic record, claiming a computer science degree he never received. The Yahoo board member who oversaw the vetting of Thompson, Patti Hart, was also revealed to have fudged her degrees.
So now Hart will be leaving the Yahoo board, a position worth $80,000 a year, but with extras thrown in for serving on various committees, plus stock grants. Here's Kara Swisher, blind-sourcing the heck out of the news:
Yahoo!'s Santa Monica location. Activist shareholder Dan Loeb has fired another salvo in his ongoing battle to change the company's management.
Dan Loeb, the swashbuckling hedge funder who's trying to remake Yahoo's board of directors and, while he's at it, get Yahoo to jettison its CEO, has just upped the ante yet again. And he's done it, in typical Dan Loeb fashion, with an ancient means of communication. No, I don't mean a stone tablet or dispatch carried by Pheidippidian messenger over great distance. I mean a letter. Printed on paper and delivered, the letter itself says, by "Federal Express and Hand Delivery."
You half expect Loeb to revive the Pony Express at this point! This is all starting to feel like a novel by Laclos.
But I kid. Here's the top part:
Third Point LLC sent Yahoo! a demand today pursuant to Section 220(b) of the Delaware General Corporation Law to inspect books and records relating to the hiring of CEO Scott Thompson, the appointment of Patti Hart to the Yahoo! Board, and the selection of Board Members Peter Liguori, John Hayes, Thomas McInerney, Maynard Webb, Jr., and Fred Amoroso. A copy of Third Point’s demand is attached below.
Third Point believes that Yahoo! shareholders and employees will be best served if the Board accepts responsibility quickly for this latest debacle. If the Directors are truly interested in “working in a constructive manner with Third Point”, they should provide answers promptly. We believe that this internal investigation by this Board must not be conducted behind a veil of secrecy and shareholders deserve total transparency.