Still, he went out at a very fast clip, his hypercompetitive instincts kicking in. “I had done no biking all summer,” Ackman now admits. (Ackman also owns an estate in upstate New York and lives in the Beresford, a historic co-op on Manhattan’s Central Park West.) The two would cycle the 20 or so miles to Montauk, where they would meet up with the rest of the group and ride out the additional 6 miles to the lighthouse, at the tip of the island. The plan was for Loeb, who is extremely serious about fitness and has done sprint triathlons, a half-Ironman, and a New York City Marathon, to pick up Ackman at Ackman’s $22 million mansion, in Bridgehampton. It happened last summer when Ackman decided to join a group of a half-dozen dedicated cyclists, including Loeb, who take long bike rides together in the Hamptons. The story of the Ackman-Loeb cycling trip is so widely known in the hedge-fund eco-system that it has practically achieved urban-legend status, and Loeb himself was eager to remind me of it. Do you know about the Ackman cycling trip with Dan Loeb?” ![]() On top of that he is pointlessly, needlessly competitive every time he opens his mouth. And he combines that with this sort of noblesse oblige that lots of people find offensive-me, generally not. He is very smart-but he lets you know it. “There is a saying in this business: ‘Often wrong, never in doubt.’ Ackman personifies it. Yet, from what I hear, he behaves that way with just about everybody.”Īnother hedge-funder describes the problem he has with Ackman in more measured tones. It’s truly bizarre, given that his failures-Target, Borders, JCPenney, Gotham Golf, First Union Real Estate, and others-prove he’s as fallible as the next guy. You can almost see him puckering his nostrils so he doesn’t have to smell these inferior creatures. The disgusted, annoyed look on his face when confronted by the masses beneath him is like one you’d expect to see confronted by a homeless person who hadn’t showered in weeks. “He seems to look at other members of society, even legends such as Carl Icahn, as some kind of sub-species. “The story I hear from everybody is that one can’t help but be intrigued by the guy, just because he’s somewhat larger than life, but then one realizes he’s just pompous and arrogant and seems to have been born without the gene that perceives and measures risk,” says Chapman. It’s Ackman’s perceived arrogance that gets to his critics. Along for the ride are some smaller, well-regarded hedge-fund investors-who would like to be billionaires-John Hempton, of Bronte Capital, and Sahm Adrangi, of Kerrisdale Capital. Lined up against the 46-year-old Ackman on the long side of the Herbalife trade were at least two billionaires: Daniel Loeb, 51, of Third Point Partners, who used to be Ackman’s friend, and Carl Icahn, 77, of Icahn Enterprises. “If he jumped off a building in pursuit of super-human powered flight but then slammed to the ground, I’m pretty sure he’d blame the unanticipated and unfair force of gravity.” ![]() “Ackman seems to have this ‘Superman complex,’ ” says Chapman Capital’s Robert Chapman, who was one of the investors on the other side of Ackman’s bet. If you knew that Bernie Madoff was running a Ponzi scheme, and you didn’t tell anyone about it, and it went on for 33 years. If the government comes out and determines this is a completely legal business, then I will lobby Congress for them to change the law. They’ve never had someone like me prepared to say the truth about the company. How long was he willing to “sit on this bet”? Ackman replied, “We’re not sitting. An interviewer on CNN reminded him that Herbalife had been around since 1980 and had withstood many previous challenges to its business plan. ![]() (Ackman declines to discuss the specifics of his trade.) “This is the highest conviction I’ve ever had about any investment I’ve ever made,” he announced on Bloomberg TV. He says he is certain Herbalife’s stock, which in mid-February traded around $40 per share, will go to zero, and he has bet more than a billion dollars of his own and his investors’ money on just that outcome. Ackman has called Herbalife a “fraud,” “a pyramid scheme,” and a “modern-day version of a Ponzi scheme” that should be put out of business by federal regulators.
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