Business
Column: Will billionaire Bill Ackman ever learn to shut up?
There was a time, I must admit, when the hedge fund billionaire Bill Ackman was one of my Wall Street heroes.
It started in December 2012. Ackman had decided to take a short position in the shares of the multilevel marketing firm Herbalife.
Ackman justified his bet with a heroic 334-deck Power Point presentation laying out all the features of the Los Angeles company that he said made it indistinguishable from a scam: It marketed its nutritional supplements as unique products when they were actually commodity supplements sold at premium prices, he said. It was a pyramid scheme in disguise, and more.
Students are forced to withdraw for much less…Rewarding her with a highly paid faculty position sets a very bad precedent for academic integrity at Harvard.
— Bill Ackman attacks Claudine Gay for plagiarism, before his own wife was also accused
Some of Ackman’s points dovetailed with reporting by me and my colleagues at The Times — that its widely touted “affiliation” with UCLA was a penny-pinching attempt to gain reflected scientific credibility from the university’s reputation (to UCLA’s discredit) and that it exploited Latinos in its marketing, for example.
In short, I saw Ackman’s campaign as an effort to take down a company that needed taking down. That was the good side of Bill Ackman — willing to take a short position in a highflying stock and back it up with solid research. Only someone with a lot of money and even more personal vanity seemed capable of this audacious approach.
As it happened, however, Ackman’s campaign also revealed the drawbacks of Ackmanism. He was so confident that government regulators would seize on his claims and bring the stock — then trading in the mid $40s — to zero, that he publicly disclosed that he had placed a $1-billion short bet against the company. (Short investments make money if the shares fall.)
His audacity brought Ackman haters out of the woodwork. Among those who harbored old gripes about Ackman was the storied investor Carl Icahn, who evidently (as I wrote) “relished the opportunity to put the squeeze on a short-seller who had been unwise enough to proclaim his vulnerable position to the world.” Icahn took the other side of the bet, propping up Herbalife’s price.
Ultimately, the company settled a Federal Trade Commission lawsuit by paying $200 million to 350,000 consumers who had been gulled by “Herbalife’s deceptive earnings claims” into signing on as Herbalife marketers. The company agreed to restructure its business.
That didn’t save Ackman, because the company survived. He disclosed in early 2018 that he finally had exited his short investment in Herbalife, taking a loss that some investment analysts estimated at the full $1 billion.
Obviously, Ackman’s mistake then was braggadocio. Had he kept his short bet quiet, he might have been able to ride Herbalife’s price decline down to a healthy profit. But he couldn’t resist boasting about how smart and audacious he was.
The same character flaw has been on display in Ackman’s latest crusade, which began as an ultimately successful effort to oust Claudine Gay as the president of Harvard. This effort necessarily had to be waged in public, since it was clear that only public pressure would force the hand of Gay and Harvard’s leadership.
Ackman began his crusade with complaints about Gay’s response to purported antisemitism on the Harvard campus and her flatfooted response to a tendentious question from right-wing Rep. Elise Stefanik (R-N.Y.) at a congressional hearing. After her resignation as president, Ackman latched onto accusations of plagiarism in some of Gay’s academic writing to assert that she should also be fired from the university’s faculty.
“Students are forced to withdraw for much less,” Ackman tweeted. “Rewarding her with a highly paid faculty position sets a very bad precedent for academic integrity at Harvard.”
That’s the public position that has come back to bite Ackman where it hurts the most. By pushing on the plagiarism accusations against Gay, Ackman opened the door to a broader inquiry into plagiarism in academia — specifically, in the work of his wife, Neri Oxman, a former professor at MIT.
The publication by Business Insider of allegedly plagiarized passages in Oxman’s work has set Ackman off on a delirious public snit against Business Insider and contortions about what is and isn’t plagiarism and what volume of it warrants professional extermination, all played out in extended tweets. The battle has led to further examination of Oxman’s work, which doesn’t always impress with its coherence.
A few other billionaires with ambitions of running the world have learned that they have a better chance of getting what they want out of life by remaining in the background. One is Peter Thiel, who privately and quietly bankrolled a privacy lawsuit brought by wrestler Hulk Hogan against the celebrity website Gawker.
Thiel’s role in backing Hogan’s lawsuit with a $10-million donation remained a secret until after a jury returned a $140-million judgment against Gawker. Would Gawker have lost if it could have made Thiel’s role public? Possibly not. By remaining behind the curtain, Thiel got what he wanted, which was effectively to put Gawker out of business.
Then there’s Elon Musk, who was able to bask in his public image as a brilliant engineer with the ability to solve global warming and advance the cause of space travel through his companies Tesla and SpaceX. That lasted until he bought Twitter and became the tweeter-in-chief, revealing himself as an unreconstructed right-wing antisemitic conspiracy monger.
The effects this revelation will have on Tesla’s electric vehicle sales and SpaceX’s role as a government contractor are still unclear, but they may not be good.
There’s more to this than a yarn about a billionaire hedge fund manager with terminal digital logorrhea. Ackman plainly never learned the lesson of the Streisand Effect, which describes how efforts to conceal or suppress information end up bringing that information even greater public attention.
(The term refers to an attempt by Barbra Streisand to have an aerial photo of her Malibu estate removed from a government mapping project; rather than secure her privacy, Streisand’s lawsuit turned the photo into a sensation on the internet, where it remains easily available.)
Ackman’s public conniptions on X, formerly Twitter, don’t make him, Oxman, MIT or the MIT Media Lab, where Oxman used to be a professor, look good. And none of it would have happened if Ackman had kept his mouth shut.
That brings us to what has reemerged into public awareness as a result. Oxman’s reputation as a public intellectual, such as it was, doesn’t seem to have been enhanced by the more recent scrutiny of her work. Not that doubts about her output are entirely new: In 2018, Rachelle Hampton of Slate.com memorably, and accurately, described Oxman’s Twitter feed as “a stream of majestic gobbledygook.”
The Streisand Effect demonstrated its potency as recently as Monday, when Ackman posted a fantastically lengthy tweet responding to a report in Business Insider about Oxman’s dealings with the late sex trafficker Jeffrey Epstein, who had been a big contributor to the MIT Media Lab. Who knew? Today, plenty of people.
Ackman objected to Business Insider’s assertion that he “pressured” MIT in emails to keep Oxman’s name out of the developing Epstein scandal. (Business Insider attributed the “pressure” claim to the Boston Globe, but the Globe didn’t use that term and merely reported the emails.)
In his own defense, Ackman posted the key email in question and urged his X followers to read it “carefully so you can see for yourself.”
Ackman must have been bluffing, on the assumption that no one would bother actually reading the email. Those who do will discover that it reads unmistakably as a threat to do damage to MIT’s reputation if Oxman’s name is mentioned in connection with the Epstein matter.
Here’s the money quote, from a message from Ackman to Joi Ito, then the Media Lab’s director:
“It is very important that you don’t mention Neri’s name or otherwise get her involved or she will have to issue her own statement to protect her reputation explaining why it was sent and at whose request, who else received similar gifts, how she met Epstein, who else at MIT received funding from Epstein … This will of course blow this up even more which we would certainly not like to see happen.”
Tell me that doesn’t remind you of that stock joke in which gangsters tell their target, “Nice place you got here. Be a shame if anything happened to it.”
This only resurrected the noisome history of Epstein and the Media Lab, which MIT surely hoped would be dead and buried after it issued an independent report on the matter in January 2020. The report says Ito “cultivated Epstein as a donor” even after Epstein’s 2008 conviction in Florida for soliciting minors for prostitution. Ito resigned from MIT in 2019.
Among the beneficiaries, according to the report, was Oxman, who met Epstein on campus in 2015 and received donations from him totaling $125,000 for her research (Ackman says it was $150,000). In 2017, she arranged to have a ceremonial resin “orb,” apparently a gewgaw given to donors and other honorees that she designed, delivered to Epstein. After their one meeting in 2015, Ackman says, Oxman “never accepted an invitation or saw or spoke to [Epstein] again.” The MIT report doesn’t state otherwise.
MIT can’t be happy that Ackman has turned the spotlight again on the Media Lab, which has regularly been criticized as an overblown hive of inflated egos with the skimpiest record of accomplishments to its name. Anyway, Oxman left MIT in 2021.
The greatest damage that Ackman’s tweets have done may be to the debate over academic plagiarism. Despite asserting that Gay’s plagiarism damaged Harvard’s reputation for “academic integrity,” he now argues that allegations of Oxman’s copying of passages and phrases from other sources — including even Wikipedia — without proper attribution amount only to trivial citation errors, not plagiarism at all.
He has threatened to sue Business Insider, which says its stories on the issue are “accurate and the facts well documented.” He also has threatened to do a scrub on the academic work of MIT’s hundreds of faculty members in search of plagiarism.
Is there any clarity to come out of this mudslinging? The answer is no — just more mud. And more noise … until Ackman learns to shut up.
The highest gas prices in the country are making it tougher for some gig drivers to make a living.
Gas prices have shot up amid the war in the Middle East. On average, California gas prices are the most expensive in the United States, according to data from the American Automobile Assn. The average price of regular gas in California is almost $6. The national average is a little above $4.
While Uber and Lyft drivers have concocted clever ways to cut gas consumption, they say that without some relief they will be forced to leave the ride-hailing business.
John Mejia was already struggling to make money as a part-time Lyft driver when soaring gas prices made his side hustle even harder.
“Unfortunately, it’s the economics of paying less to drivers and gas prices,” he said. “It actually is pulling people out of the business.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig work offers drivers the freedom to work for themselves and more flexibility, but being independent contractors also means they must shoulder unexpected costs.
Ride-sharing companies say they’re trying to help, but drivers say the gas relief comes with caveats. For now, drivers say they’re being pickier about what rides they accept, cutting hours and are looking at other ways to make money.
Mejia, who started driving for Lyft more than a decade ago, said in his early days, he would sometimes make $400 in three hours. Now it takes 12 hours to rake in $200.
The San Francisco Bay Area consultant is an active member of the California Gig Workers Union, so he knows he isn’t alone. California has more than 800,000 gig rideshare drivers, according to the group, which is affiliated with the Service Employees International Union.
On social media sites such as Reddit and Facebook, gig workers have posted about how the higher gas prices are eating into their earnings. Among the tricks they are suggesting: reducing the number of times the ignition is turned on or off, avoiding traffic, working in specific neighborhoods and at times with high demand and switching to electric vehicles.
Gig drivers usually have only seconds to decide whether to accept a ride on the app, but they have become more strategic about which rides and deliveries they accept.
That means they are more likely to sit back in their cars and wait for higher fares for quick pick-up and drop-off.
“I highly recommend the ‘decline and recline’ strategy, rejecting unprofitable rides until a better one appears,” wrote Sergio Avedian, a driver, in the popular blog the Rideshare Guy.
Pedestrians cross the street in front of a Lyft and Uber driver on Wednesday. High gas prices have made it hard for gig drivers to make a living, cutting into their profits.
(Jess Lynn Goss / For The Times)
Uber, Lyft and other companies have unveiled several ways to help drivers save on gas.
Uber said drivers can get up to 15% cash back through May 26 with the Uber Pro card, a business debit Mastercard for drivers and couriers. Based on a worker’s tier, they can get up to $1 off per gallon of gas through Upside — an app that offers cash rewards — and up to 21 cents off per gallon of gas with Shell Fuel Rewards. The company also offers incentives for drivers who want to switch to electric vehicles.
“We know the price of gas is top of mind for many rideshare and delivery drivers across the country right now,” Uber said in a blog post about its gas savings efforts.
Lyft also said it’s expanding gas relief through May 26 because the company knows that the extra cost “hits hardest for drivers who depend on driving for their income.”
The company is offering more cash back, depending on the driver’s tier, for drivers who use a Lyft Direct business debit card to pay for gas at eligible gas stations. They can get an additional 14 cents per gallon off through Upside.
Drivers say the fine print on the offers dictates which card they use and where they fill up gas, making it difficult for them to save money.
“If I do the math, it’s ridiculous,” Mejia said. “They’re offering us nothing.”
Uber declined to comment, but pointed to its blog post about the gas relief efforts. Lyft also referenced the blog post and said “the gas savings were structured through rewards to maximize stackable opportunities.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig workers have struggled with rising gas prices in the past.
In 2022, Lyft and Uber temporarily added a surcharge to their fares amid record-high gas prices following Russia’s invasion of Ukraine. This year, Uber is adding a fuel charge to its fares in Australia for roughly two months to offset the high cost of gas for drivers. Lyft said it hasn’t added a fuel charge in the U.S. or elsewhere.
Margarita Penalosa, who drives full time for Uber and Lyft in Los Angeles, started as a rideshare driver in 2017. Back then, gas was cheaper. She would easily hit her goal of making $300 in eight hours. Now she’s making just $250 after working as much as 14 hours.
Gas prices, she said, used to be less than $3 per gallon. Now some gas stations are charging more than $8 per gallon.
“Take out the gas. Take out the mileage from my car and maintenance. How much [do] I really make? Probably I get $11 for an hour,” she said.
Jonathan Tipton Meyers wants to spend fewer hours as a rideshare driver.
He already juggles multiple gigs even while driving for Uber and Lyft in Los Angeles. He’s a mobile notary and loan signing agent, a writer and performer.
Driving is “a very challenging, full-time job,” he said. “It’s very taxing and, of course, wages were just continually decreasing.”
John Mejia, a longtime Lyft and Uber driver, poses for a portrait before attending a meeting about unionizing gig drivers.
(Jess Lynn Goss / For The Times)
Even if oil continues to flow through the Strait of Hormuz, which Iran reopened Friday, it could take a while for gas prices to come down to earth, said Mark Zandi, the chief economist at Moody’s Analytics.
“There’s an old adage that prices rise like a rocket and fall like a feather,” he said. “I think that’ll apply.”
In the meantime, it will be survival of the fittest drivers. If enough of them decide to leave the apps, the ride-hailing companies could be forced to raise fares further to attract some back.
“Those who approach rideshare driving strategically, tracking expenses, choosing trips carefully, and optimizing efficiency are far more likely to weather periods of high gas prices,” wrote Avedian in the Rideshare Guy blog. “For everyone else, a spike at the pump can quickly turn rideshare driving from a side hustle into a money-losing venture.”
The proprietor of Los Angeles’ legendary Clifton’s has given up on reopening the shuttered venue.
It’s just too difficult to do business in downtown’s historic core, he says.
Andrew Meieran bought Clifton’s on Broadway in 2010 and poured more than $14 million into repairs, renovations and upgrades, adding additional bar and restaurant spaces in the four-story building. In 2018, he found that demand for cafeteria food was too low to be profitable, and he pivoted to a nightclub and lounge concept called Clifton’s Republic, featuring multiple dining and drinking venues. Meieran has tried elaborate themed environments, such as a tiki bar and forest playgrounds, and renting out the location for big events to spark more interest.
It was never easy, but during and since the pandemic, the neighborhood has grown increasingly unsafe as downtown has emptied of office workers and visitors.
Storefronts are gated up due to vandalism in the historic district in downtown Los Angeles on Tuesday.
(Eric Thayer / Los Angeles Times)
The alley behind Clifton’s Cafeteria in the downtown historic district Tuesday.
(Eric Thayer / Los Angeles Times)
Vandalism has been rampant, with graffiti appearing on the historic structure almost daily. Vandals would use acid or diamond glass cutters to deface the windows, often cracking the glass. It would cost Meieran more than $30,000 each time to replace the windows. Insurance companies either stopped offering policies that covered vandalism or raised premiums by as much as 600%, he said.
There has been continuous crime in the area, he said, including multiple assaults on people in front of his building. He last shut the venue last year, hoping things would improve and he could come back with a business that could work. Now he has given up. Someone else may take over the space or even the name of the historic spot, but he is done trying.
“We’ve lost our way,” Meieran said. “I want to get up on the tops of the skyscrapers and yell that people need to pay attention to this.”
The disenchantment of a business leader who used to be one of downtown L.A.’s biggest backers shines a spotlight on the stubborn safety concerns, rising costs and thinner foot traffic that have made it increasingly difficult for even iconic businesses to survive.
The once-popular institution dates back to 1935, when it was a Depression-era cafeteria and kitschy oasis that sold as many as 15,000 meals a day when Broadway was the city’s entertainment hub.
It served traditional cafeteria food such as pot roast, mashed potatoes and Jell-O in a woodsy grotto among fake redwood trees and a stone-wrapped waterfall reminiscent of Brookdale Lodge in Northern California.
It’s not the only once-prominent destination that has failed to find a way to flourish in today’s market. Cole’s, one of L.A.’s most famous restaurants and often credited with inventing the French dip sandwich, closed last month after a 118-year run.
“The bigger problem for us and the rest of the industry is the high cost of doing business,” said Cedd Moses, who used to operate Cole’s and has backed many other bars and restaurants in historic buildings downtown for decades. “That’s what is killing independent restaurants in this city.”
Outside of Clifton’s Cafeteria.
(Eric Thayer / Los Angeles Times)
Clifton’s Republic owner Andrew Meieran stands next to a boat on the top floor of the historic restaurant in 2024.
(Wally Skalij / Los Angeles Times)
Clifton’s opened and closed repeatedly during the pandemic and, more recently, after a burst pipe caused extensive damage. Meieran opened it for special events such as last Halloween, but it has otherwise been closed.
Police are woefully understaffed and hampered by public policy, said Blair Besten, president of downtown’s Historic Core Business Improvement District, a nonprofit that arranges graffiti removal, trash pickup and safety patrols in the area.
Businesses and residents in the area would like to see a bigger police presence, but there have been protests against that by people who are not from downtown, she said.
“People are starting to see the fruits of the defunding movement,” she said. “It has not led us to a better place as a city.”
The Los Angeles Police Department is making progress downtown, Captain Kelly Muniz said, with violent crime down more than 10% from last year.
“While we’re working very hard to solve crime, to prevent crime, there are still elements such as trash, open-air drug use, homelessness and graffiti,” she said. “We’re swinging in the right direction.”
Retailers have been opting out of downtown L.A., said real estate broker Derrick Moore of CBRE, who helps arrange commercial property leases. Brands have headed to more vibrant nearby neighborhoods such as Echo Park and Silver Lake.
“A lot of operators are just electing to skip over downtown,” he said. “They’re leasing spaces elsewhere, where they feel they have a greater chance at higher sales.”
A man walks past a pile of trash left on the street in the historic district.
(Eric Thayer / Los Angeles Times)
While some businesses are struggling, many downtown residents say their perceptions of safety are improving and that the area is regaining some vibrancy.
“A lot of people live here. I think people forget that,” Besten said. “We’re all surviving. It’s just hard for all the businesses to survive.”
A green shoot for the Historic Core is Art Night on the first Thursday of every month, when 50 or 60 locations, including permanent art galleries and pop-up galleries in unused storefronts, display art to map-toting visitors who come for the occasion.
They often end up in Spring Street bars, which more typically thrive on weekend nights but are still a draw to downtown.
“I think nightlife will thrive downtown, since bars attract people that don’t mind a little grittier atmosphere,” said Moses. “Our sales are hitting new records at our bars downtown, fortunately, but our costs have risen dramatically.”
A closed sign for Clifton’s Cafeteria.
(Eric Thayer / Los Angeles Times)
Clifton’s former backer, Meieran, says he doesn’t think things are going to bounce back enough to warrant more massive investment. He has sold the building, and the owner is looking for a new tenant to occupy Clifton’s space. He still controls the Clifton’s name.
While there is still a chance he could let someone else use the name Clifton’s, Meieran is done for now — too many bad memories.
“There was a guy who was terrorizing the front of Clifton’s because he decided he wanted to live in the vestibule in front, and he didn’t want us to operate there,” Meieran said. “He would threaten to kill anybody who came through.”
He doesn’t believe official statistics that show crime and homelessness are way down in the area, and he doesn’t want to restart a business when criminals can so easily erase his hard work.
“What business that’s already on thin margins can survive that?” he said.
Trader Joe’s customers might soon get a payout from the popular grocery chain.
The Monrovia-based company agreed to a $7.4-million settlement in a class action lawsuit that claimed customers were left vulnerable to identity theft.
Customers who purchased items with a credit or debit card from March to July in 2019 might be eligible for a payment as part of the settlement.
The plaintiff alleged that some receipts printed in 2019 included 10-digit credit or debit card numbers —double what’s allowed under the Fair and Accurate Credit Transactions Act.
Trader Joe’s “vigorously denies any and all liability or wrongdoing whatsoever,” the grocery chain said in the settlement website. The grocery chain decided to settle to avoid a long and costly litigation process.
The payout will go toward paying impacted customers as well as attorney fees and other expenses.
About $2.6 million will go toward attorney fees, and the plaintiff will receive a $10,000 incentive payment, according to the settlement. The remaining funds will be distributed evenly among customers who submit valid claims.
It’s unclear how much money each customer would get, but the payout could be about $102, according to the settlement notice.
To receive the payout, customers must have received a receipt displaying the first six and last four digits of the card number.
Some customers identified as part of the settlement class have been notified and received a class ID number to file a claim.
Customers have from now until June 6 to file a claim online or by phone.
A customer not identified in the settlement can still submit a claim by entering the first six and last four digits of the card used, along with the date it was used at Trader Joe’s.
Brian Keim, the plaintiff who brought the case, used his debit card at stores in Florida in 2019. He said some stores printed transaction receipts that included the first six and last four digits of customers’ card numbers.
The receipts did not include other personal information, such as the middle digits of the users’ cards, the cards’ expiration dates, or the users’ addresses. No customer has reported identity theft as a result of the receipts since the lawsuit was filed, the grocer said.
However, identity theft doesn’t require submitting a claim for payment.
The settlement was agreed upon by both the grocer and the plaintiff, but still has to be approved by a court. A hearing is set in August.
-
Rhode Island3 minutes ago2 dead, 1 seriously hurt after crash on I-95 South in Warwick
-
South-Carolina9 minutes agoMissouri beats South Carolina in game two
-
South Dakota15 minutes agoDemocrats fail to field candidates for a majority of South Dakota legislative seats
-
Tennessee21 minutes agoTennessee drops series to Ole Miss with game two loss
-
Texas27 minutes agoCo‑worker confesses to killing missing North Texas man and stealing his car, police say
-
Utah33 minutes agoEmbattled Utah Rep. Trevor Lee loses county GOP convention — but wins enough support to make primary
-
Vermont39 minutes agoWomen’s Lacrosse Bested in Burlington by Vermont – University at Albany Great Danes
-
Virginia45 minutes agoSkydiver rescued after crashing into scoreboard during Virginia Tech football scrimmage