Let’s get this out of the way: In director Ted Braun’s new film “Betting on Zero,” hedge fund titan Bill Ackman comes off as the good guy, the company Herbalife is the bad guy, and they’re both engaged in an epic, years long battle to prove each other wrong on national television. For a disturbing documentary about an activist investor taking on alleged corporate fraud, the film is also incredibly entertaining.The first scene opens in July 2014, with the supremely confident CEO of Pershing Square Capital, Bill Ackman making his case against Herbalife on camera, to a room full of Wall Street suits gathered at the AXA Equitable Building in midtown Manhattan. The presentation was titled “Why Herbalife Is Going to Collapse,” and Ackman called it “the most important presentation” of his career. If you’re invested with Bill, it better be. In December 2012, Ackman bet more than a billion dollars of his own and his investors’ money on his certainty that Herbalife’s stock, which today is trading around $58 per share, would go to zero. That bet still stands. Ackman continues to claim that Herbalife, the 36-year-old nutritional-supplement company, is a fraudulent pyramid scheme. And, once again, he’s out in a very public way to prove it.You can already see where this is going. In a dramatic feature, anyone working for or with Herbalife could be cast as an archenemy. Herbalife lobbyists would be seen greasing the palms of Washington regulators charged with investigating the company. The lead protagonist would become a martyr for bleeding heart protestors, the victims of widespread corporate greed and deceit. It’s a familiar crusade, calling to mind films like “Erin Brockovich” and “The Big Short.”But it isn’t a dramatization. It’s a hard-news documentary. And its message is all the more visceral because this fight that riveted Wall Street in 2014-2015 is not only real – it’s still ongoing. Ackman’s sticking to his trade, hoping Washington regulators will “do their job.” Meanwhile, Herbalife is countering the film with this website.Through a syncopated series of on-camera interviews with financial journalists, former Herbalife employees, and Ackman himself, we learn how it works: Herbalife has no retail stores. Instead, it ships its products to Herbalife salespeople directly (a.k.a distributors.) As presented, their sole job is to recruit more distributors. By selling products to new recruits, this commission-based system is lucrative for those at the top of the corporate pyramid. Those above take a percentage of the sales of those below, and on it goes. The problem is, of course, the bottom layer of employees who must invest their own money up front, but can’t turn a profit. We meet many of these folks in the film, but stepping into the lead role are 15 Latino immigrants, who lost hundreds of thousands of dollars as Herbalife distributors. We see them in church crying and praying for justice. We follow them as they meet with the prominent Massachusetts attorney Douglas Brooks, in joint pursuit of a class action lawsuit. At one point, they surround Brooks in a prayer circle, pouring their faith into him as the good steward of their fates. When Brooks fails to sway a judge in their favor, the immigrants hug him anyway, thanking him for his efforts.Interview after interview, fact after fact, the audience is asked to judge for themselves. It soon becomes obvious, however, that the film is anti-Herbalife, pro-Ackman. Herbalife CEOs – both the company’s late founder Mark Hughes and Michael Johnson, the current CEO, repeatedly appear in real archived footage resembling cheesy TV evangelists, enthusiastically conning massive convention hall crowds who have come for a heady dose of corporate can-do inspiration.Almost an hour into the film, we’re all waiting for the shoe to drop. Is anyone going to take Herbalife’s side? Yes, Bill Ackman’s enemies will. Enter billionaire Carl Icahn. An activist investor himself, Icahn took the opposing bet on Herbalife, and promoted it on every major network. The public brawl that ensued riveted Wall Street as two prominent investors engaged in personal mudslinging fights on-air, one dirtier than the next. On January 24, 2013, after buying a 13 percent stake in Herbalife, Icahn went live on Bloomberg TV. “It’s no secret to the world and Wall Street that … I don’t like Ackman,” he fumed. On Ackman’s investment approach, he added: “I think if you’re short, you go short, and, hey, if it goes down, you make money. You don’t go out and get a roomful of people to bad-mouth the company. If you want to be in that business, why don’t you go and join the S.E.C.”As for Herbalife itself, no employee or executive agreed to Ted Braun’s requests to be interviewed during the two-year course of filming.What’s Missing?There are, however, a few gaping holes in the film. At no point does director Ted Braun cover Bill Ackman’s investment track record. At Pershing Square, Ackman manages an $11.6 billion dollar portfolio - and he’s famous for taking huge one-sided bets with it. All told, Pershing Square has invested about $4.1 billion in Valeant Pharmaceuticals, a company with $32 billion of junk debt, according to Bloomberg News. In 2015, this investment contributed to a 20.5% loss for the fund, its worst performance year on record. Despite all this, Bill Ackman still commands respect on Wall Street. When he talks, people listen. But this film doesn’t give voice to Ackman’s investors – who are currently getting hosed because of Bill’s bad bets. Essentially, the entire film focuses on how Herbalife makes money, and risks losing credibility by not holding hedge fund manager Ackman up to the same standard.An Unfinished StoryYou could have cut the kinetic energy in the audience during Thursday night’s sold-out premiere at the Tribeca Film Festival with a knife. For the very first time, Bill Ackman and his entire Pershing Square entourage were going to see a silver screen movie about themselves. Journalist and author William Cohan, who has been covering this story in print since its inception, was also present and eager to see how Ted Braun used his voice-of-reason commentary. During the post-screening Q&A, each of them stood proudly before the audience and listened to Ackman, once again, reiterate his position: “I will follow this trade to the ends of the earth,” he said, to effusive applause. He’s said it many times before – but this time, the audience really was on his side.Regardless of your stance on Ackman, the film paints a damning portrait of corporate fraud, one that is all too familiar. One leaves the theatre with an urgent desire for justice, and deep doubts as to whether or if it will be served. The film has yet to find a distributor, so its potential impact on Herbalife remains to be seen.
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