In his nearly three-year battle against Herbalife, activist Bill Ackman has done something entirely new. His goal has not been to improve the company but to annihilate it. And he has used every tool at his disposal – his wealth, his connections, his cozy relations with the press – to try and achieve his goal.
Conventional wisdom holds hedge fund billionaires are driven by greed. Something else moves Ackman. If motivated by greed alone, he would have taken his profits and bolted long ago. Herbalife is his holy war, his white whale. He must kill it, whatever it takes.
In the upcoming issue of Fortune, our Roger Parloff unpacks this bizarre corporate saga. Roger’s account is deeply reported, scrupulously fair, and beautifully told. I also found it deeply disturbing. Activist investing plays an important role in our system. But Ackman’s campaign against Herbalife seems a step too far. Read it here, and draw your own conclusions.
Out tomorrow, our new list of the Most Powerful Women in business. There’s an activist angle here, too: Three of our top ten have tangled with investor Nelson Peltz in the last few years – and are still standing.
More news below.
• United Airlines CEO makes dramatic exit
Jeff Smisek, CEO of United Continental, has stepped down in connection with a federal probe of the airline – a surprise departure after the company’s chief financial officer recently left for a job at Paypal. Meanwhile, two other senior executives tied to the investigation, which involves the Port Authority of New York and New Jersey, will also be leaving. CEO since 2010, Smisek had faced immense pressure to improve United’s financial performance. Reuters
• Apple’s big event kicks off today
Traditionally, the September event from Apple is when the gadget maker talks about the product that is by far the most important to its bottom line: the iPhone. Observers say later today, an updated strategy behind the iPhone will be presented by the Apple team, likely less about a physical redesign and more about software upgrades. Other potential news-making unveilings? A potential new iPad and a rumored set-top box that will have a redesigned remote that can be used to play Wii-style games on the Apple TV. Wired
• FTC steps up Staples-Office Depot probe
The Federal Trade Commission is intensifying its probe of Staples’ offer to buy rival Office Depot for $6.3 billion, with a decision that could come as soon as October. While the office-supplies retailers face a lot of competition from Amazon.com and Walmart for the sale of pens, papers and other retail supplies, the FTC is mostly focusing on the competitive environment for government and corporate clients – which have become very important to Staples and Office Depot as retail sales have faced pressures. WSJ (subscription required)
• Macy’s to close stores as sales ebb
Macy’s is planning to close between 35 to 40 of the company’s namesake department stores early next year, a move that comes as the retailer’s sales growth has stalled as traffic continues to fall at malls. The company has angled to pivot by focusing on e-commerce, where more consumer spending has gravitated, and is often considered among the retailer leaders in that space. While some stores are closing, CEO Terry Lundgren said physical stores are still a vital component to the omnichannel strategy. Fortune
Around the Water Cooler
• Queen Elizabeth II marks a milestone
Queen Elizabeth II today becomes Britain’s longest-reigning monarch – surpassing a record set by her great-great grandmother Queen Victoria by reigning for 63 years and seven months. Queen since the age of 25, Elizabeth is the official sovereign of 15 Commonwealth realms in addition to the U.K. and is thus head of state for 138 million people. Though the date is historic in nature, Queen Elizabeth isn’t planning any celebrations to mark the royal achievement. BBC News
• Instagram’s move to make money
Facebook-owned Instagram is finally growing up: starting September 30, any company in 30 countries can advertise on the platform with a “self-serve” option. That differs from the previous strategy, which only allowed a select group of brands to advertise in the U.S. Ultimately the shift is about Facebook’s plan to monetize its big acquisitions – Facebook spent $1 billion for Instagram. The picture-sharing app could make as much as $1 billion annually in the next three to four years, according to some estimates. Fortune
• Yahoo tax strategy hits snag
Yahoo warned the IRS has declined to rule on the legality of a maneuver pursued by the Internet company to spin out shares of Chinese e-commerce giant Alibaba without paying taxes – implying the government could rule against approving the strategy. Yahoo earlier this year planned to spin off the Alibaba investment amid great pressure on Wall Street to return money to shareholders. But the hope of avoiding a massive tax bill is now somewhat in doubt, though Yahoo added the IRS hasn’t made a final decision if the proposed plan was taxable. Fortune