On Monday, the New York Times detailed William A. Ackman’s “extraordinary attempt to leverage the corridors of power” in order to to drive down Herbalife stock prices. Ackman, who runs the hedge fund Pershing Square Capital Management, has gone short on Herbalife.
He stands to make a great deal of money if the stock price declines — and he is not about to leave its decline to chance. So, the Times reports, Ackman has enlisted congressional representatives to solicit an investigation. He has organized news conferences and letter-writing campaigns. He is trying to make his attack on Herbalife’s stock seem a grassroots, civil rights issue.
The only thing extraordinary about all of this, however, is that the New York Times finds it extraordinary. These are some of the hoariest practices in American capitalism. Indeed, in 1886, Isaac Bromley, who was both a journalist and a lobbyist, accused the Times of being a tool of Wall Street bears in driving down Union Pacific stock. Bulls were using two other papers, the Indicator and the Graphic, to boost the stock.
Charles Francis Adams Jr., the president of Union Pacific, found himself in despair as Congress debated bills in 1886 to investigate his railroad. The railroad had a history of corruption — but that was not the point of the investigation.
Senators had unintentionally, Adams wrote, “been like jumping-jacks under the hidden manipulation of Wall Street influences. Men in Wall Street have pulled the strings and these senators have jumped up on their legs and waved their arms exactly like manikins.”