The Sad Conversation Bill Ackman And Dan Loeb Reportedly Had Before They Stopped Speaking

Buried in the unflattering Vanity Fair profile of Daniel Loeb is a sad anecdote about the demise of the friendship between the sharp-tongued activist investor and Bill Ackman.

Late last year, Ackman, who runs Pershing Square Capital, publicly said that he's shorting $1 billion worth of Herbalife, a multi-level marketing company that sells nutritional supplements.

It's Ackman's belief that Herbalife is a "pyramid scheme" that targets lower income individuals, especially from the Hispanic speaking population.

Shortly after Ackman's presentation, Loeb snapped up an 8.2% stake in the company. He also called Ackman's pyramid scheme accusation "preposterous." Loeb also gave Herbalife a stock a price target of $55 to $68 a share in a letter to investors.

He exited the position sometime in the first quarter of this year for a nice profit. Herbalife's stock was trading below Loeb's price target, though. The highest the stock hit during that time frame was $46.19 a share.

That didn't seem to sit well with Ackman who confronted Loeb about the trade at Vanity Fair's Oscar party on February 24th.

From Vanity Fair:

In February both Loeb and Ackman attended Vanity Fair's Oscar party in Los Angeles. A person there reported that Ackman went up to Loeb, said hello, then added about Herbalife, "Look, you really shouldn't have done that," to which Loeb replied, "Why? Why shouldn't I have done that?" Ackman said, "It was really wrong." Loeb replied, "No, why? I made $50 million. What's wrong with that?" The two men no longer speak.

Ackman told Andrew Ross Sorkin in an NYTimes Q&A earlier this month that Loeb neither is nor has been "a close friend of mine."