Activist investor Bill Ackman blasted the JCPenney board in yet another publicly released letter.  

Ackman, who is the largest shareholder in the retailer and has a seat on the board, writes about how he thought other board members were excluding him from meetings.

That turned out to not be true. 

From the letter:

Yesterday's press release implies that my letter was the first time the board was made aware of my concerns about the hiring process. As you know, for nearly four months I have been advocating for the promised search process to be launched. Last Friday, I wrote a several-thousand-word email to the board outlining my concerns about our current trajectory and the need for a rapid search process. I asked the board to consider my thoughts over the weekend. When Tom wrote back on Monday dismissing my approach, I assumed that the full board had met to consider my concerns and that Tom, as the spokesperson, was accurately representing the views of the outcome of that meeting.

I later learned that no such meeting had taken place and that Tom had simply called directors individually. A director I spoke to earlier this week explained that they agreed with my approach for an accelerated search process, but Tom did not a call a meeting so they could share their views with other board members. Boards must have the ability to deliberate openly amongst one another so that all points of view can be adequately discussed. By not calling a meeting, Tom prevented the board from properly functioning and fulfilling its fiduciary duties.

Then, Ackman, who owns a private Gulfstream G550, goes on to take a dig at Ullman for the use of a private jet. If you recall, the New York Post called out former CEO Ron Johnson for using the company jet to commute between Dallas and his Palo Alto, Calif. home. 

From the letter: 

I am concerned that personal relationships and potentially other business dealings outside of JC Penney are affecting certain board members’ judgment. While I do not know whether Tom is still splitting his GV aircraft with Mike – perhaps not, because Mike has access to our two G450s (one has to ask the appropriateness of our aircraft fleet in light of the current state of the Company) – these type of outside business dealings can color the thinking of our board when independent judgment is most needed. As a result, I would like the full board to be provided with full and fair disclosure on any directors’ business activities or financial dealings, charitable donations or activities, outside board involvement with Mike or JC Penney of any kind so that the full board is informed of the potential for any director conflicts.

Pershing Square Capital Management owns a 17.74% stake in JCPenney, according to the latest 13F filing.

Since September 28, 2010, the date of Ackman's initial 13D regulatory filing on JCPenney, shares of the retailer have tumbled more than 47%.

Here's the full letter: 

To My Fellow Directors:

I think JC Penney is at a very critical stage in its history and its very existence is at risk. During a period like this one, it is absolutely critical that we work together to solve our problems. It is essential that our board function extremely effectively or we will certainly fail. In my history as a board member of many public companies over the last 15 years, I have never before released a public letter to a board of which I was a current member. That was admittedly an extraordinary step, but you should understand that I did so as a last resort after attempting to negotiate a resolution of my concerns about the recruitment process with our Chairman and the Company’s advisors over the last week. After having read the board’s public response to my letter and considering the events of the last few weeks, I am concerned that a small subset of the board is negotiating and speaking on behalf of the full board, that the rest of the board has not been properly informed and has not been given an opportunity to express its views, nor is even included in deliberations about what to do.

A proper functioning board needs to be fully informed about all material facts about a corporation in order to make deliberate and intelligent decisions. Extreme candor among directors is critical. Directors need to hear from one another in an open forum so all issues can be aired in a transparent fashion. Directors must put personal relationships and issues aside that might color their decision-making process. The board must be led by a Chairman who is unbiased, can make decisions without regard to personal relationships, and focused only on what is best for the corporation.

In recent weeks, our board has ceased to function effectively.

Material information is not being properly shared with the board, and the board does not have access to independent advice. As the Chairman of the Finance committee, I need to have full access to the financial affairs of the corporation in order to help lead the board in making critical financial decisions in fulfilling my fiduciary duties. When Mike became CEO, he terminated Alix Partners and cutoff Blackstone from access to information and a role in assisting us in analyzing the current state of affairs. My team was similarly cut off from access to information. This is despite the fact that when I joined the board, the Company explicitly agreed in writing to allow the Pershing Square analysts access to information so that they could assist me in analyzing the financial affairs of the Company. Alix Partners and Blackstone were hired by the Board to assist the Board in its deliberations and to help the Company in controlling cash, expenses, and future commitments. It was entirely inappropriate for Mike to terminate the board’s advisors without the board’s knowledge or consent. We are now flying blind.

While I like Robert Pruzan and Centerview, they are Mike’s advisors, not the Board’s financial advisors. They are conflicted, therefore, in providing independent financial advice to the board. Robert is therefore not likely to recommend that Mike should be terminated, nor is he going to criticize any decisions that have been made by Mike. He is not going to show us projections that would lead one to the conclusion that management should be changed. We are therefore not able to receive the objective advice that we need in order to make intelligent decisions.

Bob Peterson and Susan Ray were very helpful to me and my team and the board in understanding what was going on J.C. Penney. I, and I believe, the rest of the board thought very highly of both of them. Once Mike became CEO, Bob and Susan said they were no longer authorized to answer our questions. When I confronted Mike directly, he reluctantly agreed to allow Bob and Susan to speak to my team. Last week, Bob was constructively terminated (his strategy position was eliminated and he was offered a middle-tier position in the finance department, so he quit). I was told that Susan was fired last week. I do not know the basis for her termination.

Material hiring and firing decisions are being made without the board being properly consulted. Our marketing has been a major problem. I thought we had begun to make material progress when Sergio was brought in as a consultant. Marketing messages were tested. Data were generated to determine ROIs of our various campaigns. Traffic was recovering, Mother’s Day was strong, and we appeared to be recovering. Unfortunately, Mike fired Sergio without the board’s consent. He has now hired Debra Berman, a friend of Mary Beth’s from Kraft. No other candidate was considered for the position as far as I know.

Up until Mike’s current tenure, there was a process for hiring executive officers. They would be vetted, at a minimum, by the compensation committee, and their package would be considered by the committee and recommended to the board for its approval. In light of the fact that Ms. Berman is a friend of a director, particularly one who is Chairing the search committee, this new executive’s hiring should be analyzed with greater scrutiny. Sometimes CEOs hire friends of directors in order to curry favor with those directors. While I am not suggesting that this is what has happened here, proper process was not followed in this personnel decision.

Furthermore, in light of the criticality of this role and the difficulties we have had in this area, one would reasonably have assumed that the full board would have had the opportunity to interview Ms. Berman. That could easily have been accomplished at the last board meeting for apparently her hiring was being negotiated at that time. As Allen Questrom pointed out in his interview on CNBC yesterday, the decision to hire a consumer packaged goods marketing executive as the CMO of J.C. Penney is a strange decision. The skills and experience one learns from marketing lunch meats and American cheese to consumers are not logically applicable to marketing JCPenney to our customer base.

Imagine my surprise when I learned of Ms. Berman’s hiring from a press release on my Bloomberg machine. Unless the compensation committee met to consider Debra without me, Mike hired Debra without the approval of the comp committee. I and other directors still do not know how much she is being paid, how much equity she has been granted, etc. This is entirely inappropriate in my view.

I am very concerned about personnel decisions that are being made without the board being asked for its consent or even notified. It appears to me that a lot of other qualified people have been terminated, individuals with no experience in a particular function are given important roles in that area, and that some very questionable hiring decisions have been made. For example, at the last meeting, Mike mentioned that he had made a member of the merchant team head of real estate and construction even though she has no background in real estate or construction.

When Mike first joined as our interim CEO, he told me that he intended only to hire one or two people total. This made sense to me because interim CEOs do not make many material hiring decisions (those are left for the new CEO) and instead focus on recruiting a new CEO. While the board agreed that it would take the ‘interim’ out of Mike’s title to assist him with working with the team in Plano, Mike was hired by this board as an interim CEO. He has not acted like one. When Mike was asked about succession at the last board meeting, he said that he did not know of any other executive who could run the Company. I learned yesterday from an analyst that Mike had told her and the other members of the analyst community that he was not an interim CEO, but the board’s long-term choice. Mike provided the analyst community with false information. That explains why the analyst community was so surprised yesterday to hear that the board had started a search process. If Mike had told the truth that he was indeed an interim CEO, there would be no disruption in revealing that a search process was underway.

Compare how Mike has handled the situation with A.G. Lafley, the interim CEO of P&G. The situation is remarkably analogous. P&G’s board made a decision to replace CEO Bob MacDonald. Not having an immediately obvious candidate to promote internally or from the outside, the board brought back A.G. Lafley, the former CEO, as an interim CEO. As the interim CEO, Lafley immediately began a process to identify the next CEO and gave a story the following week to the Wall Street Journal so that there was no confusion about Lafley’s interim status.

I am also very concerned about the budgeting process. We received three different financial projections – a new one at each of the last three board meetings – each one projecting worse results than the previous one. Most disconcerting was Mike’s disavowal of the first two projections when he explained at the last meeting that those were not “his numbers.” I find this particularly troubling because these projections were presented by Mike himself to the board in May and in June so it is hard for me to understand why he should not have ownership for May and June’s projections. Now Centerview is running a new set of numbers.

In light of the uncertainty about our projections, I am also extremely troubled about the aggressive inventory purchases and future commitments we are making for later this year and 2014. Yesterday, I received a call from one of the Company’s largest vendors who explained his concern about the number of purchase orders he has received from the Company. When a vendor expresses concern that J.C. Penney is buying too much, we need to take a very hard look at the commitments we are making. In my opinion, Mike is overly optimistic about the near-term future of J.C. Penney. This vendor recommended, and I agree, that JCP should be making only conservative inventory commitments and then chasing inventory in the event we sell beyond our projections.

Yesterday’s press release implies that my letter was the first time the board was made aware of my concerns about the hiring process. As you know, for nearly four months I have been advocating for the promised search process to be launched. Last Friday, I wrote a several-thousand-word email to the board outlining my concerns about our current trajectory and the need for a rapid search process. I asked the board to consider my thoughts over the weekend. When Tom wrote back on Monday dismissing my approach, I assumed that the full board had met to consider my concerns and that Tom, as the spokesperson, was accurately representing the views of the outcome of that meeting.

I later learned that no such meeting had taken place and that Tom had simply called directors individually. A director I spoke to earlier this week explained that they agreed with my approach for an accelerated search process, but Tom did not a call a meeting so they could share their views with other board members. Boards must have the ability to deliberate openly amongst one another so that all points of view can be adequately discussed. By not calling a meeting, Tom prevented the board from properly functioning and fulfilling its fiduciary duties.

Beginning on Monday, I and my counsel attempted to negotiate a resolution of our differences. We proposed that the Company publicly disclose that a search process had been launched and that the Company commit to an accelerated time frame. My counsel and I negotiated with Chip Delaney of Skadden and Rob Pruzan. I assumed that the board was being informed about our request and the advisors were representing the full board’s views on this issue. My argument for public disclosure of the search process was based on the fact that a search process would likely leak as the search firm contacted potential candidates. We believed that the leak would be more damaging and disruptive to the Company than if we affirmatively told the world what was going on. I also believed that publicly announcing the process would keep the board focused on getting the search done promptly.

After our proposal had been rejected by the advisors, I decided to write yesterday’s letter and release it to the media because I thought it was the right thing to do as a fiduciary for the Company and its shareholders. Sometimes being “disruptive” is exactly what a Company and board needs at a critical time.

At our last board meeting at the first evening’s executive session, Tom terminated our discussion despite directors asking for the opportunity to continue to discuss our concerns. As a result, the executive session we held at the end of the following day did not give the board an adequate opportunity to discuss our affairs as many directors had to leave to make flights home. To state the obvious, executive sessions require sufficient time so all issues can be fully discussed and debated, and important decisions can be made.

I am concerned that personal relationships and potentially other business dealings outside of JC Penney are affecting certain board members’ judgment. While I do not know whether Tom is still splitting his GV aircraft with Mike – perhaps not, because Mike has access to our two G450s (one has to ask the appropriateness of our aircraft fleet in light of the current state of the Company) – these type of outside business dealings can color the thinking of our board when independent judgment is most needed. As a result, I would like the full board to be provided with full and fair disclosure on any directors’ business activities or financial dealings, charitable donations or activities, outside board involvement with Mike or JC Penney of any kind so that the full board is informed of the potential for any director conflicts.

I have lost confidence in our Chairman’s ability to oversee this board. I would therefore recommend that Tom be replaced as our Chairman. Allen Questrom said on TV yesterday that he is willing to be our Chairman in the event we meet certain conditions; namely, he is not willing to step into a hostile situation and he must be comfortable with the CEO we designate. If we join arms and this conflict behind us, reach out to Allen as a full board, and commit to move forward with an accelerated search process, I believe that Allen would come on board to help us right away. With Allen as our new Chairman, we would have the benefit of one of the great retail CEOs in assisting us in overseeing the Company at this critical time, and we would have his input and direction in selecting our next CEO, something with which he has enormous experience and relationships.

I hereby request that we hold a board meeting as soon as possible so that the board can deliberate and make decisions about all of the above.

Time is of the essence. Hopefully, this is the last board letter I need to release to the press.

Sincerely,

Bill

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It appears that hedge fund manager Bill Ackman might surrender in his fight against JCPenney's board.

This just in from New York Post reporter James Covert... 

NY POST EXCLUSIVE: Bill #Ackman set to abandon push to quickly replace $JCP CEO Mike Ullman - Source #nyp

— James Covert (@jamescovert1) August 12, 2013

EXCLUSIVE: "Resolution" to $JCP board battle with #Ackman expected as soon as tomorrow - Source #nyp

— James Covert (@jamescovert1) August 12, 2013

Ackman, who is JCPenney's largest shareholder and a member of the board, fired off strongly worded letters to the retailer's board last week. 

His first letter on Thursday demanded that they replace JC Penney's interim CEO Mike Ullman in the next 30 to 45 days. Ackman's second letter said that he has lost confidence in the board's chairman Tom Engibous and called for his replacement with Allen  Questrom.

JCPenney called Ackman's actions "latest actions are disruptive and counterproductive."

Ackman's $12 billion Pershing Square Capital owns nearly an 18% stake in JCPenney.

He has taken a bath on the stock so far.

Since September 28, 2010, the day when Ackman filed his first regulatory filing on JCPenney, shares of the retailer's stock have tumbled more than 50%.

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Hedge fund manager Bill Ackman, the founder of $12 billion Pershing Square Capital Management founder, can't stay out of the spotlight.

Ackman's two huge, public bets on JCPenney and Herbalife have gone disastrously wrong this year, and, to many, Ackman's behavior seems increasingly desperate and unhinged.

Ackman has been betting on a turnaround at the struggling retailer since 2010 and he's been betting that nutritional product seller Herbalife will fail.

So far, he has lost hundreds of millions of dollars on each of these investments — an estimated $600 million on his JCPenney investment and at least $300 million on his Herbalife short.

To some, his latest behavior--trying to replace the new CEO of JC Penney only four months after Ackman brought him in to repair the damage inflicted by Ackman's last CEO--to accusing a fellow hedge-funder George Soros of criminally ganging up with other investors to attack his Herbalife short--reek of desperation, or worse.

We checked in with a source close to Ackman to get a reaction to this. Our source familiar with Ackman assured us that Ackman is not having some sort of meltdown.  

In fact, our source says, Ackman is "very calm" and was swimming laps on Friday afternoon. What's more, Ackman considers this sort of investing "fun," the source explained.

What is apparently fun for Ackman, however, is rubbing others the wrong way.

Starbucks CEO Howard Shultz, for example, described what Ackman has done to JC Penney as "despicable." And the JC Penney drama is a long way from being done.

Ackman, who is JCPenney's top investor, fired off two public letters to JCPenney's board last week.

His first letter on Thursday demanded that they replace JC Penney's interim CEO Mike Ullman in the next 30 to 45 days. 

Ackman's second letter, on Friday, said that he has lost confidence in the board's chairman Tom Engibous and called for his replacement with retail legend Allen  Questrom.

JCPenney responded to Ackman by saying his "latest actions are disruptive and counterproductive."

There have also been reports that Ackman, the largest shareholder in JCPenney and member of the board, threatened to sell his shares if the board didn't find a new CEO.

Of course, that would be at a big loss for his fund. Since September 28, 2010, the date of his initial 13D regulatory filing on JCPenney, shares of the retailer have tumbled more than 47%.

According to some retail analysts, the timing of Ackman's letters is incredibly poor, especially since retailers are gearing up for the back-to-school season. 

"He's a media disaster. That's what he is. If there are things going on with the company, the last thing you want to do is air your dirty laundry in public. And when you are trying to attract someone to take over the company, what do you think the board is doing at a crucial time like back to school? Denying these claims," an analyst who wished to remain anonymous, commented. 

The back-to-school work for JCPenney, such as picking out inventory and merchandise, has already happened, though.  

According to Brian Sozzi, Belus Capital's CEO and chief equities strategist, the concern surrounding Ackman's actions would be on the potential impact on the holiday season and the first quarter of next year. 

"What the letter has done, if the news flow from prior weeks didn't already, is knock the first domino over in a chain of events that could impact holidays and the first quarter of 2014.  JC Penney owns all its back to school items, correct.  But, what it doesn't own is the market price it will get for those goods.  If vendors are telling them it will cost more to get them the merchandise it requires to compete during the holidays, JCPenney may look to become especially promotional for back to school.  Inventory is a retailer's lifeline to cash daily," Sozzi told us.  

"So while they are out discounting more for back to school, and getting higher invoices for their vendors for future purchases, the stock market will grow concerned regarding the company's liquidity levels and access to additional liquidity.  As the stock goes down, vendors get even more nervous, charge higher prices, JC Penney becomes more aggressive with its inventory to raise cash," he added. 

Another analyst felt like Ackman isn't taking responsibility for JCPenney's situation because he was the one who picked the former disastrous CEO Ron Johnson as CEO. Ullman was asked to return to rescue the company after Johnson got ousted back in April.  

 "Bottom line—Ackman got his company into this situation by hiring Ron Johnson and he was happy to turn on him. Now he's throwing a tantrum because he wants Ullman out because things are not happening quick enough. The guy has been around for four months. They should be thanking Ullman for stepping in.  All these public tantrums, any CEO, good luck getting him in there," an analyst, who wished to remain anonymous, explained. 

Still, Ackman isn't the only large investor who wants to see change in JCPenney's management. Hedge fund manager Richard Perry's firm, which owns a 7.3% stake in JCPenney, also sent a letter on Friday asking the retailer to replace Ullman, CNBC's David Faber reported. 

And then there's Herbalife.

At the beginning of last week, there were shocking reports that Ackman had filed a complaint with the SEC accusing George Soros's Soros Fund Management accusing them of violating securities laws by illegally colluding with other investors and ganging up on him.

Before that news broke, CNBC's Scott Wapner reported that Soros had amassed a large long position in Herbalife.  Herbalife, a multi-level marketing firm that sells nutrition products, is the stock Ackman is famously short.  He's shorting $1 billion worth of Herbalife because he believes the company is a "pyramid scheme." 

"Well this seems to be like a desperation move and the kettle calling the pot black. When Mr. Ackman went short he had a huge public announcement and urged people that the stock was way overvalued. Now there are people buying the stock and it's cutting into his profits, so he's trying to retaliate,"former SEC chairman Harvey Pitt said in an interview with CNBC this week.

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Activist investor Bill Ackman stepped down from JCPenney's board today following a public feud with the retailer's board of directors. 

CNBC's Andrew Ross Sorkin caught up with Ackman this morning following his resignation.

"I elevated a bunch of issues that are critically important by making them public. We came to an agreement on Ron Tysoe," Ackman told Sorkin, adding, "The board will now function more effectively without the noise." 

Last week, he fired off letters to the board demanding that they find a new CEO to replace interim CEO Mike Ullman and that chairman Tom Engibous resign.

It appears that part of his reasoning for sending the letters is that he was taking what he believed to be a Warren Buffett-style investing approach.  (He has compared his investment strategy to Buffett before.)

Sorkin reports: 

His basis in the company is $25 per share. So it is not clear that he has any ambition to sell these shares at a low price. One other thing, he quoted Warren Buffett.  Warren Buffett had a letter that he wrote in 1993. I just want to read you a bit of it. He is wrapping himself in sort of the Buffett flag a little bit in terms of his decision to go public which has been something that people, including myself, have been highly critical of. This is what Warren Buffett said. He said, "A director who sees something he doesn't like should attempt to persuade other directors of his views. If he is successful, the board will have the muscle to make the appropriate change.  Suppose though, that the unhappy director can't get other directors to agree with him. He should then feel free to make his views known to the absentee owners. Otherwise known as the public shareholders. Directors seldom do that of course. The temperament of many directors would in fact be incompatible with critical behavior of that sort. But I see nothing proper in such actions assuming the issues are serious. Naturally, the complaining director can expect a vigorous rebuttal from the unpersuaded directors. A prospect that should discourage the dissenter from pursuing trivial or non-fractional causes." 

Ackman, who runs $12 billion Pershing Square Capital Management, is still JCPenney's top shareholder. He owns a nearly 18% stake in the retailer's stock.  

He had reportedly threatened to sell his stake if the board didn't replace Ullman.  That doesn't seem to be the case, though.

"If I wanted to sell, I could have sold all along during the quarterly window," Ackman told Sorkin. 

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Hedge fund manager Bill Ackman, who runs Pershing Square, fired back at Starbucks Howard Schultz after  the CEO ripped into the activist investor for leaking letters to JCPenney's board in the media. 

According to Bloomberg News, he says that Schultz "doesn't understand JCPenney facts." 

Those are comments that Ackman made to Charlie Rose, according to Bloomberg News.

Ackman will be on Charlie Rose tonight at 11 p.m. ET on PBS. 

Shultz recently told CNBC's Maria Bartiromo that Ackman had ruined the lives of thousands of JCPenney employees. 

"Bill Ackman was the primary engineer and architect of recruiting Ron Johnson to the company and he and Ron Johnson co-authored the strategy that fractured the company and ruined the lives of thousands of JCPenney employees and fractured shareholder value," Schultz said in the CNBC interview. 

Last week, Ackman fired off two letters to JCPenney's board demanding that they replace interim CEO Mike Ullman within 30 to 45 days.  He also sent a letter saying he had lost confidence in chairman Tom Engibous and asked that he resign, too. 

Ackman, who remains JCPenney's top shareholder, stepped down from the board this morning. 

According to Bloomberg, Ackman called JCPenney a disappointment during his Charlie Rose interview. 

He also said that he's disappointed in Dan Loeb's Herbalife trade.

Weeks after Ackman publicly revealed that he's shorting more than $1 billion worth of Herbalife, Loeb, who used to be Ackman's friend, snapped up a sizeable long position.  He exited that stake in the second quarter for a nice profit. 

We'll be tuning in tonight to see Ackman's interview. 

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Activist investor said on "Charlie Rose" on PBS that he's disappointed in the way that ex-friend Daniel Loeb handled the whole Herbalife situation.

Back in December, Ackman publicly announced that he's shorting more than 20 million shares of Herbalife, a multi-level marketing company that sells nutritional supplements. Ackman is known for being a mostly long only investor.  The last public short he had was MBIA. 

"We believe Herbalife is operating a pyramid scheme," he said in the interview, adding that he is shining a spotlight on the company so the regulatory community can investigate. 

Shoftly after Ackman disclosed his short position, Loeb, who runs Third Point LLC, snapped up an 8.2% stake in the company. He called Ackman's "pyramid scheme" accusation "preposterous."

Ackman claimed in the interview last night that Third Point had a price target in the $70s and sold the position in a few weeks. 

To be clear, Loeb actually gave the stock a price target of $55 to $68 a share in a letter to investors. 

From that letter: 

Applying a modest 10-12x earnings multiple suggests Herbalife’s shares are worth $55-$68, offering 40-70% upside from here and making the company a compelling long investment for Third Point. Given that the Company has historically traded more in the 12-14x range (and traded at 16-20x earnings through much of 2011 and early 2012), the opportunity for the Company to tell its side of the story tomorrow at its Analyst Day in New York, and the significant short interest, we believe shares could even trade well above our current price target.

Sometime during the first quarter Loeb exited his Herbalife position for a nice profit. 

Ackman admitted that it was a "good trade." 

"I'm longer term," he explained. "I'm not a trader. What we do is take large concentrated positions." 

Rose asked him if he respected Loeb.

"He has a good track record," Ackman answered. 

Continuing on, he added that was disappointed in the way Loeb handled it though by getting in and exiting shortly after.

Loeb has recently been leaving a series of taunting messages on his Bloomberg terminal targeted at Ackman. 

As for his rival, Carl Icahn, Ackman explained that Icahn is still angry at him from when he sued him years ago.  

"He's used Herbalife as really a platform to 'get back at me.'"

Since Ackman's short position was revealed, shares of Herbalife have surged more than 50%. 

The stock is going up "simply because Carl Icahn and others have been promoting it," Ackman said.

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Last night embattled hedge fund manager Bill Ackman was on "Charlie Rose" explaining everything from Herbalife to JCPenney to Dan Loeb.

If you missed it, the interview will air again tonight at 8:00 pm on Bloomberg TV.

"JCPanic" and the Herbalife hedge fund titan war aside, we learned a lot about Ackman the man in this interview — like how he wouldn't want to do any other job than the one he has now. He said he'd even do it for free, because restructuring companies does such a service for the American economy.

Ackman's got some ideas on that too — the American economy, that is — and those ideas led to a discussion about politics that made Ackman sound like he was stumping in Washington. He even touched on Mitt Romney (a topic no Wall Streeter has broached in a loooonnnng while).

From the transcript (via Bloomberg TV):

BILL ACKMAN: ...I think what people forget is, you know, Wall Street has unfortunately in the last -- certainly since the crisis, has gotten a pretty bad name, but Wall Street is responsible -- it’s probably the biggest engine for job creation, enabling businesses to access capital, enabling businesses to grow. You look at Howard Hughes was a creation out of thin air. It’s now a business that employs -- you know, it’s going to employ thousands of people, create a ton of jobs.

CHARLIE ROSE: Do you think the criticism of Mitt Romney during the campaign for his activities in running a private equity firm were unfair?

BILL ACKMAN: Yes, yes -- absolutely. I think good, private equity investors create a lot more economic value than they destroy.

That's when Bill, who has given money to both Republicans and Democrats over the years, and Charlie got down to solutions.

CHARLIE ROSE: What will save the country?

BILL ACKMAN: What will save the country are good economic policies that create the right incentives and an administration that is supportive of the business community. I think that’s actually very important. And, you know, policies that will make us competitive globally. It’s a global economy. The story today I think in today’s "Journal" about companies merging with European businesses to move their operations offshore from a tax point of view. We have to have a tax policy that discourages that kind of activity.

CHARLIE ROSE: So you can bring the money home.

BILL ACKMAN: Yes. I look at the United States --

CHARLIE ROSE: Is that the idea, have a tax policy so that the money will come home rather moving it offshore so you don’t have to pay taxes on it.

BILL ACKMAN: Yes. But I think if -- you know, the United States is not dissimilar to the kind of companies we invest in. We invest generally in very good companies that have lost their way. And with better management, enormous value can be created.

If you look at Canadian Pacific, this was a dying --

CHARLIE ROSE: This is one of your investments.

BILL ACKMAN: -- it was dying railroad under Hunter Harrison. And in very short order, you know, less than a year and a half he’s made dramatic changes to the business. The President is the CEO of this business that we call America. And the decisions he makes with respect to, you know, the way incentives are designed, the way he works with Congress as a leader in effectuating policy change can make an enormous difference in the growth rate of the country, in job creation, in happiness, in our safety I think that we can’t diminish the importance of business and business practices. I mean look at what Bloomberg has accomplished as the mayor of New York City. He took his for-profit mentality and has applied it to a city. And I think the city has accordingly thrived. I’d love to see the same thing happen to the country.

And here's the kicker we know some of Wall Street was golf clapping for:

CHARLIE ROSE: So we should only let rich people?

BILL ACKMAN: No, but we should -- I think that there’s a lot to be said to have someone with a business background making decisions about the economy.

Ackman closed the interview by saying that if he weren't an investor, he might go into politics — but only if he could "effectuate change" the way he does at his hedge fund.

So Ackman for President?

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JCPenney has reached an agreement with Bill Ackman so Pershing Square can begin to sell its stake in the retailer, according to an 8-K filed with the SEC on Friday. [via CNN Money]

From the filing: 

On August 13, 2013, J. C. Penney Company, Inc. (the “Company”) entered into a Registration Rights Agreement with Pershing Square Capital Management, L.P., PS Management GP, LLC, Pershing Square GP, LLC, William A. Ackman and certain affiliated Pershing Square funds (collectively, the “Holders”).  Pursuant to the Registration Rights Agreement, the Holders may make up to four requests to the Company to register the sale of the Company’s common stock beneficially owned by the Holders, subject to the limitations and conditions provided in the Registration Rights Agreement.  The Registration Rights Agreement also provides certain piggyback registration rights to the Holders.  The registration rights provided in the Registration Rights Agreement terminate when the Holders collectively beneficially own less than 5% of the Company’s common stock.  The Registration Rights Agreement contains customary indemnification provisions.

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement which is filed herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference herein.

A couple weeks ago, Ackman engaged in a public fight with JCPenney's board.

He leaked letters to the media that he had written to the board demanding that they replace interim CEO Mike Ullman and that chairman Tom Engibous resign. 

Ackman, who is JCPenney's top shareholder, also reportedly had threatened to sell his stake if the board didn't replace Ullman.  Pershing Square Capital held more than 39 million shares of JCPenney as of the second quarter ended June 30, according to a 13F regulatory filing.

After all the public drama in recent weeks, Ackman was the one who ended up stepping down from the board. 

Ackman has been betting on a turnaround at the retailer for a few years now.  So far, he has taken a bath on the stock. Since September 28, 2010, the date of Ackman's first SEC filing on JCPenney, the stock has fallen more than 48%.

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Today, during JCPenney's dismal Q2 earnings call, there was one ray of light, and it was all thanks to the most hated man in the JCPenney universe, hedge fund manager Bill Ackman.

If you're an Ackman hater, just bare with us here. The store reported a revenue miss with numbers coming in at  $2.66 billion when analysts expected $2.78 billion. The company also reported a big net loss of $2.06 per share, worse than $1.07 loss analysts expected.

But at least they've got Sephora — anyone listening to the call was reminded of that over and over again. The high-end makeup store that Ackman insisted on introducing to JCPenney during his extreme makeover of the retailer is the only thing CEO Mike Ullman and company could point to as a success.

See, while Sephora was introduced to JCPenney in 2006, its expanded presence really took center stage as part of  Ackman's plans for the store. JCPenney's current leadership has admitted as much before too. Back in June Ullman said that even though it was thought customers weren't "going to understand it. Now it’s the most profitable part of the store.” Ackman said he knew it would be back in June of 2012, when he was talking about his JCPenney stake at CNBC's Delivering Alpha Conference.

But none of this means Ullman wants to invest more in Sephora-like successes at JCPenney. How do we know this? Because his focus during the call was on regaining the Baby Boomer, bargain brand customers he lost — not on gaining new hip Sephora-type customers Ackman was trying to attract.

Those are the customers that are bringing energy into an otherwise tired business.

You can see the disconnect here. The little capex Ullman said JCPenney would spend in 2014 (around $300 million compared to the over annual $700 million its spent over the last 5 years) is going to be spent on getting more Sephoras (sounds good) and making sure the old customers are happy (sounds like more of the same).

So yes, Bill Ackman was right on this one. He just went about it the wrong way. As Brian Sozzi, CEO of Belus Capital Advisors pointed out, Macy's is modernizing — getting hipper and cooler the way Ackman wanted JCPenney to do it — but Macy's is doing this gradually.

And more importantly, Macy's is making the hip new vendors pay for it.

You win some, you lose some.

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Bill Ackman is back. 

The billionaire activist investor's latest target Air Products said this morning that it's looking for a new CEO.

Three new independent directors are also joining the industrial gas product maker's board.  Ackman's Pershing Square Capital has already agreed to vote in favor of them. 

Air Products is Ackman's largest investment ever. He owns a 9.8% stake worth about $2.2 billion. 

This stock was last trading up more than 1.7% in the pre-market.

This summer, Ackman had unsuccessfully pushed JCPenney to replace its interim CEO Mike Ullman, who took over the helm again after Ron Johnson failed to turn around the struggling retailer. 

After a very public fight, Ackman stepped down from the retailer's board and dumped his 39.1 million stake.  

Anyway, here's the Air Products press release: 

LEHIGH VALLEY, Pa., Sept. 26, 2013 /PRNewswire/ -- Air Products (NYSE: APD) today announced that it will add three new independent directors to its Board of Directors and will commence a search to identify a successor to chairman and CEO John E. McGlade, who will retire in 2014.  The actions reflect the Board's ongoing focus on best-in-class corporate governance and leadership succession planning to ensure the Air Products Board and management has the appropriate experience and expertise to deliver long-term value for Air Products shareholders.

The CEO search will commence promptly, led by a newly formed search committee of the Board with the assistance of a leading executive search firm.  The search will be conducted in a manner consistent with recruiting an accomplished executive with the skills and experience necessary to successfully lead a large, global industrial gas company.  McGlade will continue to serve as chairman and CEO during the search process and then as chairman for an agreed-upon transition period in 2014.  The incoming CEO will also join the Board as a director.

McGlade said, "Air Products is a long-cycle business, and we have taken significant actions in recent years to position the company for accelerated earnings growth in an economic recovery.  As I approach age 60 and the Board plans for my retirement, the actions our Board is announcing today will ensure an orderly leadership transition and a company that is well positioned to deliver long-term shareholder value.  We have had a constructive dialogue with Pershing Square, our largest shareholder, and are pleased they are supportive of the actions our Board is announcing today for the benefit of all Air Products shareholders."

Bill Ackman, CEO of Pershing Square, said, "We invested in Air Products because it is a great business in an industry with excellent long-term prospects.  In recent weeks, we have been delighted to get to know John and the rest of the board working with them on their mission of continuous improvement and long-term shareholder value creation.  We look forward to a successful long-term partnership."

The three new independent directors will join the Board immediately.  Two of the new independent directors, Edward Monserand Matthew Paull, will stand for election at the Air Products 2014 Annual Meeting.  Pershing Square has agreed to vote in favor of the company's slate of nominees recommended by the Board at the 2014 Annual Meeting.  The third independent director,Seifi Ghasemi, will stand for election at the 2015 Annual Meeting.  With the addition of the three new directors, three current Air Products directors will retire prior to the 2014 Annual Meeting in order to maintain an optimal board size.  Biographies of the new independent directors are below:

Seifi Ghasemi, 69

Mr. Ghasemi is currently chairman and chief executive officer of Rockwood Holdings, Inc. (NYSE: ROC), a global leader of inorganic specialty chemicals and advanced materials businesses.  Prior to joining Rockwood in 2001, he was with GKN plc, an $11 billion (revenues) global industrial company, where he served in various positions including chairman and CEO of GKN Sinter Metals and as a director of the Main Board of GKN plc.  From 1979 to 1997, he was with The BOC Group, a global industrial gas company now part of Linde AG, where he held a variety of senior positions including president of BOC Gases, Americas and, from 1996-1997, served as a member of the BOC Group Board of Directors.  He currently serves on the Board of Directors of EnerSys, the largest industrial battery manufacturer in the world, and as chairman of the Supervisory Board of CeramTec GmbH, a manufacturer and developer of advanced ceramic components.  He holds an M.S. in Mechanical Engineering from Stanford University and received his undergraduate degree from Abadan Institute of Technology.

Edward L. Monser, 63

Mr. Monser is currently president and chief operating officer of Emerson Electric Co. (NYSE: EMR), a $24 billion (revenues) global industrial controls products company.  He is responsible for Emerson's day-to-day business operations and leads the company's profit review and other strategic planning processes.  He also directs the company's demand-driven supply chain, lean manufacturing, and international business activities, which include business development and investments in emerging markets.  Monser has more than 30 years of experience in senior operational positions at Emerson and has played key roles in globalizing the company, having held increasingly senior positions at the company, including chief operating officer (2001-2010), president of its Rosemount Inc. subsidiary (1996-2001), and various operations, new product development, engineering and technology positions.  He is a member of the Economic Development Board for China's Guangdong Province and a past board member and past Vice Chairman of the U.S.-China Business Council.  He holds a B.S. in Electrical Engineering from theIllinois Institute of Technology and a B.A. in Education from Eastern Michigan University.

Matthew Paull, 62

Mr. Paull was senior executive vice president and chief financial officer of McDonald's Corporation from 2001 until he retired from that position in 2008.  Prior to joining McDonald's in 1993, he was a partner at Ernst & Young where he managed a variety of financial practices during his 18-year career and consulted with many leading multinational corporations.  He was until recently the lead independent director of Best Buy Co. and chairman of the Board's Finance Committee.  Mr. Paull currently serves as a director of KapStone Paper and Packaging Corporation and WMS Industries Inc. and as a member of the Advisory Board of Pershing Square Capital Management, L.P.  He also served as an advisory council member for the Federal Reserve Bank of Chicago.  He holds a Master's degree in Accounting and a B.A. degree from the University of Illinois.

 About Air Product

Air Products (NYSE: APD) provides atmospheric, process and specialty gases; performance materials; equipment; and technology.  For over 70 years, the Company has enabled customers to become more productive, energy efficient and sustainable.  More than 20,000 employees in over 50 countries supply innovative solutions to the energy, environment and emerging markets.  These include semiconductor materials, refinery hydrogen, coal gasification, natural gas liquefaction, and advanced coatings and adhesives.  In fiscal 2012, Air Products had sales approaching $10 billion.  For more information, visitwww.airproducts.com.

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Activist investor Bill Ackman, who runs Pershing Square Capital, spoke to MBA students at Oxford's Saïd Business School last week and the video has just been posted on YouTube. 

During his Q&A with Dean Peter Tufano, Ackman talked about some of his failures, his successes, his leadership style, his JCPenney and Herbalife investments and his overall outlook on the hedge fund industry.

He began his early experience running Gotham Partners, which he founded in his late 20s after graduating from Harvard Business School.

That fund closed about a decade after he founded it because of a bad investment in a golf course that ultimately ended with investors redeeming their capital. 

"Experience is making mistakes and learning from them. So that's what I learned. The answer is I went to business school to learn how to be a good investor. I learned the first rule of investing, which is you do your due diligence before you wire in your money." 

Learning from mistakes was a common theme in his discussion.

As for JCPenney, Ackman said he didn't think now former CEO Ron Johnson had ever made a mistake before. Ackman, who was the retailer's largest shareholder, took a bath on that investment losing hundreds of millions. 

"I don't think he had ever made a mistake before. I think Ron would be, I think he would say this today, that he would be a much better CEO the next time having a big negative experience like this." 

As for failure, Ackman noted that many of the world's billionaires have had major failures during their careers.

"On failure...I think it's how you deal with adversity that determines your ultimate success as opposed to how you deal with success that determines your ultimate success...from JCPenney and otherwise," Ackman said.  

The conversation also touched upon Herbalife, the multi-level marketing company that sells nutrition products.  Ackman has publicly called the company a "pyramid scheme" and is shorting the stock with a price target of $0. 

Ackman, who is known for being a mostly long investor, rarely shorts companies.  When he does, though, he says that he believes the country or the world will be better off once that particular company is gone. 

Ackman revealed his short late December 2012. 

"So far so good until Carl Icahn bought 16% of the company, said it was totally wrong. Seems like everyday he goes on CNBC and says what a great company it is. Every time he says that the stock goes up a few dollars..." 

"I'll make a prediction. This business will be shut down. This business will collapse. I can't give you the precise date, but we will have made progress in that direction within twelve months. That's my prediction for today." 

Watch the full video here. He talks about Herbalife at the 29 minute mark.   

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Hedge fund manager Bill Ackman, who runs Pershing Square, gave another massive slide-presentation attacking Herbalife.

Late last year, Ackman gave a 342-slide presentation on why he thinks the nutritional supplement seller will go to $0. 

Ackman believes Herbalife is a "pyramid scheme" that targets lower income people, particularly from the Hispanic population.  

Since Ackman declared his short, shares of Herbalife have skyrocketed. They have risen more than 68% since he publicly confirmed his short.  

What's more is a number of hedge fund managers have piled on by going long the stock.  Those who are long include George Soros, Richard Perry, Stanley Druckenmiller, and Ackman's rival Carl Icahn. Daniel Loeb was long for a few weeks in the first quarter, but sold his stake for a profit. Icahn has said he believes Ackman will be the victim of the "mother of all short squeezes." 

A month ago, Ackman's Pershing Square said it repositioned the $1 billion short by swapping more than 40% of the equity short position in Herbalife for put options in an effort to reduce risk.  

Even after losing about $500 million in mark-to-market losses, Ackman has remained confident in his short thesis. He has said he will take his Herbalife short bet to "the end of the earth." 

We have included his slide-deck from last week's Robin Hood Investors Conference.  The stock rose as Ackman gave his takedown.  

Please note that Ackman's slides include a bunch of video clips.  You can watch them here. 

There's a rumor going around that Shane Dinneen, the Pershing Square hedge-fund analyst who worked on the firm's famous Herbalife short, has been canned. 

We've been in touch with Pershing Square.  The firm denies that Dinneen has been fired, according to a spokesperson. A person who answered Dinneen's phone said he was not immediately available but still with the firm. 

Dinneen—a tall, red-headed native Texan and Harvard grad— has been at Pershing Square since 2008.

He was the analyst Ackman tasked with researching Herbalife before the fund decided to amass a huge short position.  

From Vanity Fair: 

Ackman listened intently to Richard’s pitch about Herbalife, but was busy at the time with a highly successful proxy fight for control of Canadian Pacific Railway. He turned the Herbalife idea over to two of his employees, Shane Dinneen, a young Harvard graduate—who bears an uncanny resemblance to Conan O’Brien—and to Mariusz Adamski, whom Ackman had met on the tennis court and then hired as an intern. The two read public documents, reviewed old lawsuits, watched strange selling videos, and learned about Herbalife’s bizarre, charismatic founder, Mark Hughes. They discovered that, a few years earlier, Barry Minkow, a convicted felon and founder of the infamous 1980s swindle ZZZZ Best, had in 2008 publicly called into question Herbalife’s practices. To avoid a costly legal battle, Herbalife had paid him $300,000. (Minkow is now in prison, for another scam.) 

Last year, at a special Sohn Conference, Dinneen took the stage alongside Ackman and helped deliver the 342-slide presentation on Herbalife.

Since Pershing Square unveiled its Herbalife short a year ago, shares of the nutritional company's stock have risen more than 131%.  The firm's bet, in other words, has cost it a boatload of money. And the pain (and losses) shows no signs of stopping.

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Today marks the one year anniversary when hedge fund manager Bill Ackman gave a historic 342-slide presentation detailing why he's short Herbalife.  

A year ago, Ackman, who runs Pershing Square Capital Management, took the stage at a special Sohn Conference in Midtown Manhattan and slammed Herbalife for being "pyramid scheme" that targets lower income individuals.

He's been betting the company will go to $0.  It's his belief that regulators will be persuaded to investigate the company and shut it down.  

In the days following the presentation, shares of Herbalife tanked to an all-time low of $26.06.

Since the day of the presentation, though, shares of the multi-level marketing company that sells nutritional products have skyrocketed more than 136 percent.

The shares are continuing to push higher today into the $81 range hitting a new all-time high of $81.75.  The stock was last trading up more than 2 percent.

A handful of hedge fund managers, most notably Ackman's arch-nemesis Carl Icahn, piled on during the last year by going long the stock.  Icahn, who has a huge stake in the company, has said be believes Ackman will be the victim of "the mother of all short squeezes."

In early October, Ackman repositioned his $1 billion equity short by swapping about 40 percent of it for put options in an effort to reduce risk. 

Despite having hundreds of millions in mark-to-market losses so far, Ackman has continued to remain confident in his short.  He has even said that he will take this to "the end of the earth." 

Below is our timeline of events: 

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Beam, the maker of Jim Beam, has agreed to be acquired by Japanese brewing and distillery company Suntory for $13.62 billion.   

Shares of Beam were last trading up more than 25% in the pre-market at about $84.30 per share. The stock closed at $66.48 per share on Friday. 

This is a huge score for Bill Ackman, who runs Pershing Square Capital. 

As of September 30, 2013 Pershing Square held 20,818,545, or 12.77%, of Beam shares, 13F data compiled by Bloomberg shows.

Assuming he hasn't pared back his stake, Ackman has made about $371,016,525 on this position since Friday. 

Dealbook's Michael J. De La Merced points out that Ackman was the one who pushed for Beam to split from Fortune Brands a few years ago.  Since Beam became a separate company in October 2011, shares have risen more nearly 24%. 

A 13F filing for the quarter ended December 31, 2011, shows that Ackman has held the same amount (20,818,545 shares) of shares in Beam.   That means he has made around $688,499,336 on this position since that time.  

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Reporters are trying to figure out whether or not Shane Dinneen, the Pershing Square analyst who worked on the fund's famous Herbalife short, is still with the firm.  

The question was first raised about a month ago when anonymous Twitter user @TheSkeptic21—who tweets constantly about Herbalife— posted on his blog a theory that Dinneen was no longer at Pershing. (TheSkeptic21 later updated the blog emphasizing that he didn't think Dinneen was "fired", but that he didn't think he was physically in the office.)

From @TheSkeptic21's blog (emphasis ours):

To be accurate I guess "fired" may be a little "technical", but I believe Shane has NOT been in the Pershing Square Offices. Leave of absence, break, vacation, lacuna, interval, hiatus, time apart; whatever conversation Bill may have had with Shane, I'm sure he let Shane know "It's not you it's me." That being said I believe Shane Dinneen and Pershing Square are lovers no more. And really let's face it, it's not Shane**.  

Dinneen was the analyst assigned to do the research before the hedge fund put on its massive Herbalife short. 

Bill Cohan reported in Vanity Fair that Ackman "turned the Herbalife idea over to two of his employees, Shane Dinneen, a young Harvard graduate—who bears an uncanny resemblance to Conan O’Brien—and to Mariusz Adamski, whom Ackman had met on the tennis court and then hired as an intern. The two read public documents, reviewed old lawsuits, watched strange selling videos, and learned about Herbalife’s bizarre, charismatic founder, Mark Hughes..." 

When Ackman first revealed his short, Dinneen got to stand on stage with him at the Special Sohn event and help deliver the 342-slide presentation on Herbalife.

So far, the short hasn't played out in Pershing's favor. The hedge fund has racked up hundreds of millions in paper losses.  

And now we have Fox Business Network's Charlie Gasparino is asking the question— Is Dinneen still at Pershing Square?

Pershing Square's public relations' firm didn't immediately respond to Gasparino's requests for comment. That's even after he publicly called them out on Twitter.

When Gasparino got on the phone with Dinneen's secretary, she said that she'd look at his calendar and try to get him on the phone, Gasparino Tweeted.  

It took a day for Rubenstein to finally tell Gasparino that they had no comment on Dinneen.

We've posted his Tweets below:  

from ackman's flacks at @RubensteinPR: "We have no comment on shane dinneen. if that changes we will let you know" wtf???

— Charles Gasparino (@CGasparino) January 28, 2014

Shane dinneen's sectry at pershing sq tells fbn that she's "looking at his calendar" and he will try and give FBN a call $hlf

— Charles Gasparino (@CGasparino) January 28, 2014

http://t.co/1JJftB24Vb loves to complain abt @FoxBusiness's ackman coverage but wont deny that shane dinneen is out at Pershsq waiting......

— Charles Gasparino (@CGasparino) January 27, 2014

it's bizarre that neither ackman nor @RubensteinPR wont deny that $HLF shorter shane dinneen has left pershing they wont even comment

— Charles Gasparino (@CGasparino) January 28, 2014

both bill ackman and his flacks at rubenstein are mum on renewed talk that shane dinneen -- co author of $HLF short--is out at pershing

— Charles Gasparino (@CGasparino) January 27, 2014

For what it's worth, we've also asked Pershing's PR people if Dinneen still physically works at the office and haven't gotten a response.

Either way, the last person who's going to drop this story is Charlie Gasparino — so we'll keep you posted.

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Hedge fund manager Bill Ackman, who runs Pershing Square Capital, sent a letter to investors last night regarding one of Pershing Square's young analysts who has left the firm.  

His letter was extremely classy.

See, for about a month, the blogosphere and Twittersphere had been wondering if Shane Dinneen, the analyst tasked with putting together the hedge fund's famous Herbalife short, was still with Pershing Square.

The bet against Herbalife has been a huge money loser, and everyone had been wondering about Dinneen's fate.

Ackman's letter confirmed that Dinneen had resigned from Pershing a while ago.   

Ackman refers to Dinneen as "one of the most talented investment analysts" he had ever worked with and someone he holds in "high regard." 

Dinneen — a tall, red-headed Texas native and Harvard graduate — spent a lot of time working on the Herbalife short thesis. In December 2012, he presented the 342-slide presentation alongside Ackman. That's something that most 28-year-olds in the industry have never done before.

So far, the Herbalife short hasn't played out in Ackman's favor. Pershing Square has amassed hundreds of millions in paper losses.  Still, Ackman writes that he remains confident in his belief that Herbalife operates as a "pyramid scheme."

He also said that Dinneen is welcome to come back to Pershing Square at any time.  

We've posted Ackman's letter below: (Emphasis ours)

Dear Pershing Square Investor,

For several months, Shane Dinneen, a member of our investment team since late 2007, has expressed interest in leaving Pershing Square to pursue other interests. As Shane is one of the most talented investment analysts I have ever worked with and someone I hold in high regard, I have done my best to convince him to stay with the firm.  Recently, he decided it was time for him to move on to areas of his own interest outside of activist investing. 

Shane has been a great contributor to Pershing Square.  Shane did superb work on GGP, Burger King, andmost recently Herbalife in addition to many other successful investments. As our Herbalife investment has moved from financial analysis to a regulatory and legal execution, Shane has not been leading this investment for some time.  Roy Katzovicz, our Chief Legal Officer, and David Klafter, Senior Counsel, have led the Herbalife regulatory effort over the past year and have made significant progress.

We wish Shane success in his future endeavors and have let him know that we will keep a seat open for him on the investment team if and when he decides to return.  Shane intends to remain a meaningful investor in Pershing Square.

With respect to Herbalife, we remain convinced that the Company has operated an illegal pyramid scheme since its founding.  We are encouraged by the recent regulatory developments concerning the Company.

Sincerely,

Bill

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On Wall Street, many of the biggest traders and fund managers love playing poker. And they're good at it, too. 

Pro poker player Phil Hellmuth, who has won thirteen bracelets at the World Series of Poker, explained that there are a lot similarities between the card game and trading the markets. 

When it comes to the market, you have traders managing money in a forum with a lot of other people around them. Just like in poker, the traders are betting against other traders and betting on or against certain stocks. 

"It's very similar. You're sitting down and you're playing against other players and you're betting on your cards versus their cards.  I also think traders, sometimes they're notorious. When they're on tilt, they over-bet a little. Same thing in poker."

Last night, hundreds of Wall Street traders, bankers and analysts gathered in the Prince George Ballroom in Manhattan's Flatiron District to play their favorite game for charity.   

The Aces & Angels "Salute the Troops Wall Street Poker Showdown" raised funds for the Intrepid Fallen Heroes Fund, Wall Street Warfighters Foundation and the Marine Corps Scholarship Foundation. Hellmuth was the host for the evening.  

Firms in attendance included Goldman Sachs, J.P. Morgan, Drexel Hamilton, Greenlight Capital, Pine River Capital, Davidson Kempner Capital Management, SAC Capital Advisors, Sanford C Bernstein & Co., Magnitude Capital and others. We also met many financial services professionals who served in the military.

The winner got a seat in the World Series of Poker tournament this summer in Las Vegas. 

If you missed the event, we've included highlights and photos of those who were in attendance. 

Goldman Sachs vice president Jon Puckhaber (left) and Goldman Sachs managing director John Knorring. (Also, we love the beard. It looks like Lloyd Blankfein really started a facial hair movement.)

Goldman Sachs managing director Dinkar Bhatia (left) and Goldman Sachs managing director/ former Marine Major Owen West

(Left to Right) Former Marine Staff Sergeant John P. Jones; Goldman Sachs associate/ Army National Guard Staff Sergeant Eric Ceglowski; and Goldman's Owen West. Sergeant Ceglowski is headed to Afghanistan next month.

Shares of Herbalife are now down about 3% after Bill Ackman's hedge fund Pershing Square launched a new website this morning.

HerbalifePyramidScheme.com, which was unveiled today, focuses on some of the company's distributors and their recruiting practices that Pershing Square believes are deceptive.

The new site specifically features ex-distributor Shawn Dahl, a former member of Herbalife's Chairman's Club.  

From HerbalifePyramidScheme.com: 

For many years, Shawn Dahl was one of Herbalife’s most successful distributors and was held out by the company as a paragon of success.  Dahl ran a lead generation business called Online Business Systems (“OBS”) that was responsible for recruiting huge numbers of new distributors, and they generated large profits for Herbalife as they sought to advance in the Herbalife scheme.  It was not until Pershing Square focused attention on Dahl and his deceptive recruiting practices that Herbalife cracked down on him.

Although Dahl is no longer a member of the Herbalife Chairman’s Club, his story remains important for a number of reasons.  First, Dahl inflicted a great deal of harm on unwitting consumers with Herbalife’s knowledge and support, and the company cannot escape responsibility for its participating in his misdeeds.  Second, we believe that OBS is still selling leads to fledgling Herbalife distributors.  Third, Dahl’s rise to the top of the Herbalife pyramid was not, as Herbalife used to pretend, the result of hard work selling Herbalife products to consumers.  Instead, he inherited a lead generation business from his mother-in-law that had been outlawed by the Canadian government, and continued to run that business with nothing changed but the name.

The new site also features a section for people to file a complaint.

In late 2012, Ackman publicly declared that he's shorting more than 20 million shares of Herbalife with a price target of $0. Ackman believes the company operates as a "pyramid scheme" and that regulators will be induced to shut it down. 

A number of fund managers, including Carl Icahn, have disagreed with Ackman by going long the stock.  

The stock was up earlier this morning after Herbalife released two press releases relating to earnings and announcing a $1 billion convertible bond note offering.

Here's a screenshot of the site: 

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Hedge fund manager Bill Ackman, who runs Pershing Square Capital Management, spoke about his massive wager against Herbalife at the annual Harbor Investment Conference.

"The last time I gave a presentation in this room it was 340-slides," he joked referring to the 2012 special Sohn Conference where he publicly declared he's short Herbalife. 

"Today, I have no slides."

Instead of presenting a new idea, Ackman decided to take questions and talk about anything people in the audience wanted to discuss.

Naturally, the elephant in the room came up after more than 18 minutes of Q&A on different stocks besides Herbalife. 

Ackman was asked by New York Times' reporter Will Alden if he had broken even on his Herbalife short.

"Not yet. We're on our way, though."

The reporter then asked him what's the break even price. 

Ackman didn't give a clear answer on that one. 

"Actually, interestingly on Herbalife, we've certainly lost a lot of money. It was interesting, as it went up, every dollar it went up, CNBC would report Pershing Square's lost another $20 million or another $100 million or whatever. But as we make money on the way down, they stop doing that reporting."

The Herbalife Short

In December 2012, Ackman publicly declared that he was shorting $1 billion worth of Herbalife, a multi-level marking company that sells nutritional supplements and weight loss shakes. Ackman said he thinks the company operates as a pyramid scheme that targets lower income individuals, particularly from the Hispanic population.  Ackman also believes that regulators, specifically the FTC, will be induced to investigate and shut down the company. 

The company then became the center of an epic clash of hedge fund titans. Shortly after Ackman's presentation, Ackman's long-time rival Carl Icahn piled on by snapping up a massive long position.  Icahn, who has made hundreds of millions on his position, has said that Ackman will be the victim of "the mother of all short squeezes." A number of other fund managers have gone long the stock, too. 

Right after Ackman revealed his short, Herbalife shares collapsed. Once other fund managers started going long, the stock surged throughout the next year resulting in hundreds of millions in paper losses for Ackman's Pershing Square Capital. 

Last October, Ackman said in a letter to investors that he repositioned his $1 billion short by swapping more than 40 percent of the equity short position for put options in an effort to reduce risk. He also continued to reiterate that he would take this short "to the end of the earth."

Ackman said Wednesday that the way he's positioned now with Herbalife he will be able to make more money.

"We didn't simply transform our position from being short. We actually now have a much larger position notionally than we had initially. So if it were to disappear tomorrow, we'd make a lot more than had it just blown up the day after I gave my last presentation. Although, life would be a little easier. But we're probably better off. In the investment business, the best way to make money sometimes if you have an investment against you...if you can...stay the course and structure yourself in a way you can benefit from a move in the stock price you can do better than you would have done."

By repositioning what Ackman did was pare back his short exposure. He also structured options in a way that gives him higher "notional" exposure.

To put that in trader terms, say you're trading the Non-Farm Payrolls number—one of the most important economic data points that comes out on the first Friday of every month. For the NFP, you might take $20-30 million in "notional" exposure.  However, as a trader, you might really only have between $50-100K in risk.

Gotta love those derivatives.

Born To Run

Ackman co-chairs the annual Harbor Investment Conference with UBS private wealth management managing director Mark Axelowtiz, who is also an actor in shows like "Law & Order" and "Boardwalk Empire".

The money raised from the event goes to the Boys & Girls Harbor, a 77-year-old non-profit that provides educational and performing arts programs to children and their families in East Harlem. 

When Ackman took the stage, his "theme song" that played was Bruce Springsteen's "Born To Run."

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