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G. Hudson

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  • Could Herbalife Wind Up As A Total Loss? [View article]
    For those shorts complaining about lack of information concerning Herbalife's China business, it only takes a few seconds to find this information. Here are some excerpts from Herbalife's 2012 Annual Report (as well as a link to that report)-

    http://bit.ly/LFITjP

    From page 4 of report-

    "In China, in order to comply with local laws and regulations, we sell our
    products through, sales representatives, sales officers, independent service providers and in retail stores."

    From bottom page 6 & top page 7-

    "In China, due to local regulations, our sales are conducted through Company operated
    retail stores, sales representatives, sales officers and independent service providers; in the areas where we have a direct selling license, our representatives, officers and independent service providers can sell Herbalife product outside of the retail establishments."

    From page 8-

    "Under the regulations published by the Chinese Government, direct selling companies are limited to the payment of gross compensation to direct sellers of up to a maximum 30% of the revenue they generate through their own sales of products to consumers. We have incurred and will continue to incur substantial ongoing costs relating to the inclusion in the China business model of Company operated retail stores, sales representatives, sales officers and independent service providers and Company provided training and certification procedures for sales personnel, features not common elsewhere in our traditional business model."

    From page 32-

    In 2005, China published regulations governing direct selling and prohibiting pyramid promotional schemes, and a number of administrative methods and proclamations were issued in 2005 and in 2006. These regulations require us to use a business model different from that which we offer in other markets. To allow us to operate under these regulations, we have created and introduced a model specifically for China. In China, we have Company-operated retail stores that can directly serve customers and preferred customers. We also have sales representatives who are permitted by the terms of our direct selling licenses to sell away from fixed retail locations in the provinces of Jiangsu, Guangdong, Shandong, Zhejiang, Guizhou, Beijing, Fujian, Sichuan,Hubei, Shanxi, Shanghai, Jiangxi, Liaoning, Jilin, Henan, Chongqing, Hebi, Shaanxi, Tianjin, Heilongjiang, Hunan, Guangxi, Hainan, and Anhui. We have also engaged independent service providers that meet both the requirements to operate their own business under Chinese law as well as the conditions set forth by Herbalife to sell products and provide services to Herbalife customers. These features are not common to the business model we employ elsewhere in the world, and based on the direct selling licenses we have received and the terms of those which we hope to receive in the future to conduct a direct selling enterprise in China, our business model in China will continue in some part to incorporate such features. The direct selling regulations require us to apply for various approvals to conduct a direct selling enterprise in China. The process for obtaining the necessary licenses to conduct a direct selling business is protracted and cumbersome and involves multiple layers of Chinese governmental authorities"

    There is even more information beyond this but thought this would be enough for people to understand that Herbalife's China business is more like a regular retail store operation.
    Jan 22 09:37 AM | 4 Likes Like |Link to Comment
  • Could Herbalife Wind Up As A Total Loss? [View article]
    NEWS FROM ANOTHER SHORT WHO LISTENED TO ACKMAN:(short lost $75,000 shorting Herbalife)

    Herbalife short-seller lawsuit against Icahn dismissed • 3:47 PM

    Daniel Ravicher had accused Carl Icahn and three large banks of helping Herbalife (HLF +3.8%) perpetuate a pyramid scheme after losing more than $75K trying to piggyback on Bill Ackman's short thesis.
    The judge ruled Ravicher could win only if he could show his purchase of put options imposed a duty on Icahn and the banks not to help Herbalife. "That is not only a counter-intuitive proposition, it violates a principle (volenti non fit injuria) that one who knowingly and voluntarily risks danger cannot recover for the resulting injury."

    MY THOUGHT: In my opinion, he should have sued ACKMAN
    Jan 21 03:52 PM | 7 Likes Like |Link to Comment
  • Could Herbalife Wind Up As A Total Loss? [View article]
    Be careful -> Quoth doesn't like investors to present facts in response to his articles. Hopefully he won't delete your comment but there is a high probability he will have my comment deleted.
    Jan 21 11:57 AM | 8 Likes Like |Link to Comment
  • Could Herbalife Wind Up As A Total Loss? [View article]
    Ask Herb how his bashing of another MLM over a ten year period turned out-

    PPD’s share price was at $32 in November 1997 when Herb Greenberg started trashing the stock and at $20 in July 2002 when Melissa Davis started trashing the stock and PPD was sold for $66.50 per share in 2011, I would say it should be fairly obvious to anyone as to who were the ones who didn’t have a clue what they were talking about as to the overall value of PPD’s business.

    Here is a short recap with excerpts of some Herbs & Ms. Davis articles-

    I watched Herb do this same thing but only worse to another MLM called Prepaid Legal Service (PPD stock symbol) over 10 years ago. He led an attack on that company that lasted several years. Here are some excerpts from a Fortune Magazine November 24, 1997 article with this title –

    LAW REVIEW: WILL PRE-PAID KEEP GROWING? A COMPANY'S HMO-STYLE APPROACH TO LEGAL SERVICES HAS WON IT PLENTY OF FANS--AND A SOARING STOCK PRICE. BUT SHORTSELLERS SAY THE NUMBERS DON'T ADD UP.

    “Wall Street is so impressed that the stock has tripled over the past 12 months to a recent high of $32”

    “But there may be a hitch: a cadre of short sellers don't think Pre-Paid earnings are all they're cracked up to be.”The accounting is unrealistic," charges Robert Olstein of Olstein's Financial Alert Fund in Purchase, N.Y., who asserts that Pre-Paid is effectively overstating its earnings because of the way it accounts for the commissions it pays its sales force. And therein lies our story. “

    Herb continued with his quest to help short sellers to knock PPD share price down with many articles including this one on 2/16/99 titled-

    Has Pre-Paid Legal's Core Growth Started to Slow?

    “The short-sellers think it was an act of desperation to counter the slowing growth of its core biz.”

    Herb likes to quote and side with the short sellers even to the point a person reading his article might think he’s either short or in bed with the shorts. Herb was so intent on attacking Prepaid Legal that he even helped Melissa Davis, who was from the same town as PPD is headquartered and who had been writing negative articles about Prepaid Legal at the Daily Oklahoman, get a job at TheStreet.com. Seems like an aggressive move by Herb for someone who is supposed to be an independent reporter but I guess it worked out for him because she immediately began writing negative stories about PPD for TheStreet.com.

    The headline for one of Melissa Davis’s first articles on 7/4/02 says it all about how independent her reporting was going to be and the following two excerpts that summarizes the pressure shorts and these supposed independent writers put on the company-

    Pre-Paid Legal: Not for the Faint of Heart

    “Short-sellers scoff. Not only is Pre-Paid's growth slowing, they say, but the company's future is threatened by a wave of lawsuits filed by its customers and sales force. They accuse Pre-Paid of being an illegal pyramid scheme that's rife with con artists. “

    “Both sides continue to do battle. And the thinly traded stock remains vulnerable to price swings. For now, it remains almost smack in the middle of its record highs and lows -- poised for either a massive short squeeze or total obliteration, depending on whom you ask.”

    NOTE: At the time the above article was written, PPD’s share price was right at $20 per share.

    So now you are probably wondering who was right and what happened to Prepaid Legal Services over the long run. Yes, shares of PPD were highly volatile and shares were run all the way down to as low as $10 per share during this difficult time when the company and its shareholders were under attack but for those who were willing to endure the short seller attacks as well as the attacks by supposed independent investment reporters like Herb Greenberg and Melissa Davis there was goo news. Apparently an independent investment group, MidOcean, in January of 2011 bought Prepaid Legal Services for $650 MILLION as reported by M. Scott Carter per 1/31/11 The Journal Record article. Here is an excerpt from that article-

    "Pre-Paid said MidOcean is purchasing all the outstanding shares of Pre-Paid for $66.50 per share"

    So if you are asking who was right about the stock- Prepaid Legal's stock had just tripled to $32 per share when he started bashing the stock & it still doubled during his continued bashing over a 10 year period-> that should answer most investors question as to who was right about that investment
    Jan 21 11:49 AM | 5 Likes Like |Link to Comment
  • Could Herbalife Wind Up As A Total Loss? [View article]
    I wouldn't expect you to be able to figure it out!
    Jan 21 10:33 AM | 7 Likes Like |Link to Comment
  • Could Herbalife Wind Up As A Total Loss? [View article]
    NOVEMBER is the key-> when he got out of JC PENNEY -> it didn't take him very long to get it done -> There were a few announcements giving him fodder to change-> he resigned from the board-> shortly thereafter he sold out of JC PENNEY-> Herbalife is a much tougher position to unwind -> He already covered a good portion of his position -> switching them to puts at who knows what level just so he could make a claim that he could still make as much money-> His December 2013 letter hinted that he had already made more changes -> " as now structured, even greater asymmetric payoff than before because of the stock price’s substantial rise."

    MY QUESTION TO YOU: If ACKMAN was going to cover HLF - do you think he would make a big announcement that he was covering OR would he be sly -> making everybody think he was still negative while sneaking out of his trade???
    Jan 21 10:12 AM | 5 Likes Like |Link to Comment
  • Could Herbalife Wind Up As A Total Loss? [View article]
    Quoth,

    You picked the wrong ACKMAN investment idea-> it's JC Penney that's going to ZERO. Give him credit for that one. Herbalife is on its way to $100. (I believe Ackman is using this time to cover -> QUESTION: How long has it been since we actually have a quote from Ackman or a spokes person for his company provided directly to a news source about Herbalife?

    NOTE: All recent stories are attributed to investors in Ackman's funds or from an investor letter that supposedly isn't for public distribution but reporters always pick it up. However a lot of them are just reporters (who knows their connection to Ackman) conjecturing and then saying- Ackman's company didn't respond to their inquiry)
    Jan 21 09:16 AM | 10 Likes Like |Link to Comment
  • How The Big Players Manipulate The Stock Market [View instapost]
    Thomas,

    Thanks for the comment. I actually wrote this article before I found out that it was mainly Ackman shorting this stock. It even made more sense to me as I thought it would be very difficult for a group of short sellers to make Herbalife's share price behave the way it was.

    I am disappointed with Seeking Alpha's editors in turning down some of my articles which I then posted to this blog. I even accurately predicted the whale would be breaking bad news the week before I found out that it was Ackman behind the shorting of Herbalife. Also another great read is my blog post on "History Repeating Itself" which talks about the 2009 short attack on Herbalife and how the stock had acted and basically predicted the share price recovery that Herbalife has had since that time.
    Jan 10 01:41 PM | 1 Like Like |Link to Comment
  • The Market Isn't Buying J.C. Penney's Holiday Line [View article]
    At least you got this one right-> I am short JCP but sold 1/10/13 $7.50 put options (which will cover current short) because I expect a slow death for JCP. Most people don't realize how difficult it is to replace store volume when you lose most of your regular customers.

    NOTE: However at some time in the not to distant future it will become obvious to all that JCP is on its way out. Another one of Ackman's delusional investments. Ackman just got it reversed instead of HLF going to ZERO -> JCP is going to ZERO & HLF is going to $100 share price.
    Jan 8 11:22 AM | Likes Like |Link to Comment
  • FTC initiative targeting deceptive weight-loss product claims hits MLMs [View news story]
    Are you still having trouble finding your popcorn along with a basic understanding of how a MLM works????

    Can't wait for the next over reaction and how you and Matt jump all in LOL thinking you really have a grasp on the situation.
    Jan 7 12:20 PM | 3 Likes Like |Link to Comment
  • Death Of A Salesman: The Herbalife Cycle In Action [View article]
    So if I started talking bad about you or your family, you would just stay quiet and not stand up for yourself or your family.

    When I invest in a company, I not only want them to address unfair accusations and/or situations- I expect them to.
    Jan 6 02:56 PM | 8 Likes Like |Link to Comment
  • Death Of A Salesman: The Herbalife Cycle In Action [View article]
    So the FTC makes this announcement that supposedly is going to be really bad for Herbalife and we hear from all the shorts how this is going to be a major problem for Herbalife and other mlm's ---> WAIT A MINUTE -> WE DIDN'T HEAR ONE WORD FROM THE ACKMAN CAMP ????????????????

    REASON= THINK ABOUT IT----> HMMMMMMMMM

    REAL REASON-> If you are closing out your short position by buying shares of HLF-> you can get into a lot of trouble for making negative comments to try to manipulate the share price lower = THE SILENCE IS DEAFENING FROM THE ACKMAN CAMP!!!!!!!
    Jan 6 02:20 PM | 9 Likes Like |Link to Comment
  • Don't Get Your Hand Caught In The Herbalife Cookie Jar [View article]
    So the FTC makes this announcement and we hear from all the shorts how this is going to be a major problem for Herbalife and other mlm's ---> WAIT A MINUTE -> WE DIDN'T HEAR ONE WORD FROM THE ACKMAN CAMP ????????????????

    REASON= THINK ABOUT IT----> HMMMMMMMMM

    REAL REASON-> If you are closing out your short position by buying shares of HLF-> you can get into a lot of trouble for making negative comments to try to manipulate the share price lower = THE SILENCE IS DEAFENING FROM THE ACKMAN CAMP!!!!!!!
    Jan 6 11:02 AM | 1 Like Like |Link to Comment
  • FTC initiative targeting deceptive weight-loss product claims hits MLMs [View news story]
    Over -reaction -> I'll give anyone odds that Herbalife's name is not even mentioned during this press conference but at least FTC gets some good press-

    This conference is NOT ABOUT HERBALIFE->

    FTC Announces Initiative Against Deceptive Claims Made by National Marketers of Fad Weight Loss Products; To Hold Press Conference Tuesday, January 7, 2014, at 11:00 AM ET (Benzinga
    Jan 3 12:35 PM | 7 Likes Like |Link to Comment
  • PharmAthene Is A Bargain: Significance Of Recent Legal, Pipeline, And Merger Developments [View article]
    Jeff,

    I appreciate your efforts to explain this case. As everyone who is following this debate knows, I do own shares in both companies but own significantly more shares of SIGA. I still believe SIGA will come out on top but actually hope PharmAthene does receive a significant award as it will basically be tax free as a result of their tax loss carry forwards which will offset any potential income from an award.

    I believe everyone reading this article should go back and re-read my Seeking Alpha article-

    http://seekingalpha.co... -> "PharmAthenes Damage Award Will Be Limited To Reliance Damages" along with the following excerpt from page 43 of PharmAthene's September 9, 2013 SEC filing of form S-4 where PharmAthene explains the risks of SIGA's drug ArestvyrTM-

    http://bit.ly/JHNmRO

    "Even if the Delaware Court of Chancery does provide PharmAthene with a remedy that provides PharmAthene with a financial interest in ArestvyrTM, PharmAthene may never receive any proceeds from SIGA’s future sales of that product.

    In addition to the risks that ordinarily accompany the development and commercialization of biodefense products, including with respect to government contracting activities (including protests filed by third parties), competition (which with respect to ArestvyrTM includes potential competing products being developed by Chimerix, Inc.), FDA and other regulatory approval and commercialization efforts, which are described elsewhere in PharmAthene’s risk factors, any interest PharmAthene may have in future sales of SIGA’s product ArestvyrTM and related products is subject to additional risks.

    In particular, SIGA’s ability to deliver product to the SNS (and potential foreign government purchasers), and the timing and profitability thereof (including the timing of SIGA’s recognition of revenue related thereto), are subject to a number of significant risks and uncertainties (certain of which are outlined in SIGA’s filings with the SEC) as to which PharmAthene has limited knowledge and no ability to control, mitigate or fully evaluate. PharmAthene has no first-hand knowledge of, and SIGA has not publicly disclosed, any information related to the potential margins or profitability of ArestvyrTM and related products."

    MY COMMENT: So if PharmAthene, even at the date 9/9/2013, believes there are a lot of unanswered risks for the profitability of ArestvyrTM , how can they expect to receive expectation damages-> Read and research footnote #99 of the Delaware Supreme Courts opinion that further explains the requirements for an expectation damage award and adds more definitive instructions to the Delaware Supreme Court's directive "damages award consistent with this opinion":


    "99 An expectation damages award presupposes that the plaintiff can prove damages with reasonable certainty. Callahan v. Rafail, 2001 WL 283012, at *1 (Del. Super. Mar. 16, 2001)(citation omitted) ("It is well settled law that 'a recovery for lost profits will be allowed only if their loss is capable of being proved, with a reasonable degree of certainty. **********No recovery can be had for loss of profits which are determined to be uncertain, contingent, conjectural, or speculative.**********...

    I REPEAT->**********No recovery can be had for loss of profits which are determined to be uncertain, contingent, conjectural, or speculative.************
    Dec 31 11:55 AM | 3 Likes Like |Link to Comment
COMMENTS STATS
264 Comments
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