Herbalife Attacks Documentary, Saying It Takes Ackman's Side

'Betting on Zero': A $1B Short Bet on the Big Screen
  • ‘Betting on Zero’ film premiered this week at Tribeca festival
  • Company created website to criticize ‘one-sided’ depiction

Herbalife Ltd. criticized “Betting on Zero,” a new documentary about its three-year battle with hedge fund manager Bill Ackman, saying the film took the side of its billionaire nemesis.

Herbalife, a controversial seller of nutrition products, created a website to counter the movie, which premiered on Thursday at the New York Tribeca Film Festival. On the site, the company notes that Ackman and one of the film’s producers were on the same crew team at Harvard. It also criticizes the documentary for not featuring one of Herbalife’s 4 million distributors.

The movie has become the latest flashpoint in the feud between Herbalife and Ackman, who has waged a more than three-year campaign to prove that the company is a pyramid scheme. Though Ackman features prominently in “Betting on Zero,” director Ted Braun says the billionaire took no part in making the film. Braun also said in an interview that he tried for a year to get Herbalife and its supporters to participate in the film and none agreed.

The film hasn’t found a distributor yet, so how widely it gets viewed -- and its impact on Herbalife -- remains to be seen.

Ackman bet $1 billion against Herbalife’s stock in December 2012, claiming it was an illegal operation. Herbalife has denied the allegations, saying it provides nutrition and economic opportunity through the selling of its supplements.

FTC Investigation

Ackman’s attempt to take down the company has included spending more than $50 million on investigators and trying to find victims. After his campaign began, the U.S. Federal Trade Commission opened its investigation, which is still pending.

Ackman’s firm, Pershing Square Capital Management, denied backing the movie.

“Neither Bill Ackman nor Pershing Square played any role whatsoever in the making or financing of the film, directly or indirectly,” the firm said in a statement. “Pershing Square did allow the filmmaker to film various public presentations that Pershing Square made about Herbalife and to interview Bill Ackman on several occasions.”

Ackman and one of the film’s producer’s, Devin Adair, were both on the Harvard crew team for a few years in the 1980s. Herbalife pointed this out on the website that it created. The company managed to get the Web address with the name of the movie, BettingOnZero.com, to tell its side.

Braun, the movie’s director, said on Friday that the financiers asked to remain private and didn’t have any economic interest in Herbalife or any connection to Ackman or Pershing Square. The company’s side of the story was represented, even without its participation, he said.

“Our film goes to scrupulous lengths to maintain independence,” Braun said.

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