Jake Barach writes for the American History of Business Journalism site about the influence investors have when they appear in business journalism.
Barach writes, “Three investing experts’ opinions, a 74.8 percent climb, a 62.7 percent drop, multiple double-digit percentage intraday swings, several hundred PowerPoint slides and two and a half years, and Herbalife Ltd.’s shares currently trade less than 1 percent below their price two weeks before Bill Ackman began his public assault on the nutritional supplement company in 2012.
“On Dec. 20, 2012, Ackman, a hedge fund manager at Pershing Square Capital Management LP, made public the details of his massive short on shares of Herbalife, sending prices down 9.7 percent on the day and 30.2 percent across four trading sessions. Within two months, Dan Loeb, founder of Third Point LLC, and Carl Icahn, founder of Icahn Enterprises LP, staked their bets on the long side of Herbalife shares. Since then, the three have written investor letters and made countless media appearances in order to defend their stance on the issue. Ackman’s failure to provide the ‘smoking gun’ for Herbalife’s impropriety during his second, three-hour, widely-covered broadcast led to an 18 percent rise in the stock’s share price as he spoke July 22, 2014.
“Though the average investor may not be sure who’s right in this situation, the swings in share prices indicate that they are clearly paying attention. The words and dollars of these three men have yet to bring to light the truth behind the company’s structural integrity and financial viability. Still, the media eye rests firmly upon them and their fellow elite investors in an effort to provide its audience with the coverage it desires, but not necessarily the coverage it needs.
“‘People shouldn’t be looking for reasonable financial advice for free on the Internet or their television. It’s simply kind of a ludicrous expectation,’ said Jeff Macke, the founder of Macke Asset Management LLC. ‘But, selling ice cream is always going to be a better business than selling kale.'”
Read more here.
