Seeking Alpha

Once more into the breach for Ackman?

  • Good for a wiggle down in Herbalife (HLF -1.9%) is CNBC reporting Bill Ackman has prepped another negative presentation on the company, and may deliver it as soon as next month's Robin Hood Investors Conference. "New Herbalife information," promises CNBC's source.
  • Herbalife is up in the area of 50% since Ackman publicly launched his short attack last December, but is about flat since David Einhorn warmed things up for him with his famous participation in an HLF earnings call in May 2012.
Comments (23)
  • Bill doesn't give up easily.
    31 Oct 2013, 01:38 PM Reply Like
  • Billy will be punished
    31 Oct 2013, 01:43 PM Reply Like
  • Ackman is beyond desperate - he is going after disgruntled employees now hoping to get some negative nuggets to sink HLF. Name me one company where you go after disgruntled employees and find them praising their ex-employer? This is great news by the way; he is out of facts and now looking for fabrications. Sad for Ackman; Great for longs. Ackman should be punished by being sent to Cambodia (HLF's new office) to help recruit distributors.
    31 Oct 2013, 01:39 PM Reply Like
  • Cambodia?! They're running out of countries to shake distributors out of...
    31 Oct 2013, 01:58 PM Reply Like
  • Lots of obese people in Cambodia?
    31 Oct 2013, 02:16 PM Reply Like
  • dont worry, between this and JCP, he's paying plenty for his desperation.
    31 Oct 2013, 02:16 PM Reply Like
  • HB123, Your are the only one on rebuttal duty today?
    31 Oct 2013, 02:17 PM Reply Like
  • You will never run out of stocks to lose money I bet.....
    31 Oct 2013, 02:54 PM Reply Like
  • According to the World Health Organization, about 14% (2 million people) in Cambodia are overweight or obese, and the overall BMI is trending upwards, so to answer your question Dampflok, yes there are a lot of obese people in Cambodia.
    1 Nov 2013, 06:43 PM Reply Like
  • Go get em' Bill!
    31 Oct 2013, 01:46 PM Reply Like
  • HB123 not everyone is a liar... There are people out there that are dissatisfied with Herbalife. And from the numbers of people that sign up and leave to the ones that stay maybe not all are dissatisfied but the majority are. And stop thinking all you Herbalife people are right this is a game you don't know Micheal Johnson personally you don't know Carl and you don't know what is going to happen. You don't work for the company you are INDEPENDENT that's it Herbalife won't even back you in a lawsuit. Let's see since you think you work for the company what is the next product being worked on? What will they reveal at the next extravaganza? You don't know cause when you work for a company you know whats going on with it. You don't have an inside track. None of us know what's going to happen one thing is for sure short or long someone is going to lose big.
    31 Oct 2013, 02:16 PM Reply Like
  • Interesting comment as it reveals what is happening with this debate: those who think they know what Herbalife is go short, and those who know what Herbalife is, go long. (Of course I am sure there are many who know nothing, but either love Carl or Bill and follow accordingly).

     

    So, some information from the "inside"... Many of us Distributors actually do know Michael Johnson and Des Walsh personally and yes, they do know many of us by name too. Now, is that the case for all of the commentators on here? Who knows. But the point is that they are very accessible to the Distributors and the company works in a unique way with corporate staff and Distributors sitting on groups together working on issues, planning, and yes discussing which products are to be launched next and which will be launched at the Extravaganzas. So yes, we do know and we do have an inside track about many of the operational aspects of the company.

     

    You are right that we don't know Carl (although the Distributors who sit on the board no doubt will) and yes we don't know what is going to happen next on Wall Street related matters, but here's what we do know from the "inside"; Herbalife is a great company and a force for good - no doubt whatsoever.

     

    And this is Bill's problem; he bought his duff info at the tail end of last year and rushed to get it out in the open, accompanied by his previously uncovered $1bn bet. I have read that he needed to make his 2012 numbers, and I have also read that he was banking on making a dent on annual requalification numbers by "outing" to Distributors that Herbalife was an "illegal pyramid" - trouble is, we knew for a fact he was wrong, and the massive (for HLF) year 2013 followed.

     

    So, Bill returns to the PowerPoint podium once again. having seen the variety of stuff he has cooked up in 2013, who knows what he will "reveal" this time. Perhaps the market research company he hired to find dissatisfied Herbalife Distributors of Customers found some.... (Wouldn't you think such people would be queuing around the block outside Pershing's offices by now?). It would be interesting to hire a research company to do the same survey for IBM, UPS, DELL, United Airlines and see if they have any dissatisfied customers ever too. Maybe he has had a change of heart: maybe finally doing due diligence has shown that Herbalife is indeed a "national treasure" (quote from someone who did do his DD), he's dumped his short position and has gone long buying 10% of the company and is pushing for all MLM companies to be operated the way HLF is, making HLF the gold standard. Then everybody would win.
    1 Nov 2013, 10:15 AM Reply Like
  • I wouldn't ridicule Bill too fast. His research is impeccable, and he takes the long view. No shorts have worked in this market. Doesn't mean they never will.
    31 Oct 2013, 02:49 PM Reply Like
  • Impeccable research didn't help him much with Target, Borders, JCP and now HLF. Yes he has many winners as well. He has a great track record - granted. But he has his fair share of duds. This is one of them - in my humble opinion. Keep an open mind. No one is saying the guy is stupid in general. He just handled this one real bad and he is still paying for it. Eventually his PUT will expire and he will be forced to cover his other piece of that short. Part of his bet has already been folded into an option. That's all I'm saying.
    31 Oct 2013, 03:04 PM Reply Like
  • His "impeccable" research comes from a 2 time convicted felon who shorted HLF stock, published negative information about the company, and then later retracted all of the claims and practically endorsed the company. Other areas of his research come from long time MLM critics who have admitted that their research would not meet statistically accurate guidelines. In collecting the data, they manipulated the results and made assumptions with no scientific basis other than the assumptions supported their theory.

     

    CNBC is reporting that Ackman will have over 600 slides in his deck this time. If it takes 600 slides to explain your NEW thesis, it might be too complex, and perhaps full of assumptions that he has to support to build his case.
    31 Oct 2013, 04:10 PM Reply Like
  • HLF is a legitimate business .
    There are other private companies that use the same marketing strategy as HLF such as 4LIFE, and are thriving
    As a matter of fact an in-law is a diamond 4Life member and is making big $$
    31 Oct 2013, 03:10 PM Reply Like
  • At what point can HLF begin a libel suit against Ackman.....this will be third attemp to tear down this company.....and now the only purpose is save his bruised EGO......he has virtually destroyed JCP through his EGO.......I have zero positions in either...never have....but Ackman is now being childish
    31 Oct 2013, 04:55 PM Reply Like
  • I doubt HLF will ever begin a lawsuit against Ackman because the discovery phase might be too tough to handle. But, one never knows.
    31 Oct 2013, 05:21 PM Reply Like
  • I don't think they will do anything until after the audit is complete, and I agree with Continental Kid that even though HLF may be perfectly legal, discovery potentially opens them up to more criticism and misunderstanding. Look at this week's earnings call. HLF said something very specific about a stock repurchase, but the NYP twisted the words to say something completely different. The only unknown would be if the FTC came in, conducted an investigation and found nothing wrong, but as the FTC would never say they are perfectly legal, the potential risk is likely too great.

     

    I suspect they would only pursue libel/slander if Ackman said something incorrect that did not involve an accusation of pyramid scheme. For example, if he said the products were unsafe, or contained lead or something. It would be extremely easy for HLF to produce their quality assurance reports, and contract with independent laboratories to show that he was wrong.
    1 Nov 2013, 07:06 AM Reply Like
  • wyostocks: "I doubt HLF will ever begin a lawsuit against Ackman because the discovery phase might be too tough to handle."

     

    I think the burden of proof is more likely the reason.

     

    Herbalife has been sued many times including the current one vs. Bostik. I'd assume they've been through the "discovery" mill before. Also, remember, discovery cuts both ways.

     

    The best tactic, IMHO, is to keep doing what they are doing ... execute their business plan and leave the legal and compliance issues to their very capable lawyers.
    1 Nov 2013, 08:15 AM Reply Like
  • User 6461431: "I suspect they would only pursue libel/slander if Ackman said something incorrect that did not involve an accusation of pyramid scheme. For example, if he said the products were unsafe, or contained lead or something. It would be extremely easy for HLF to produce their quality assurance reports, and contract with independent laboratories to show that he was wrong."

     

    Excellent point. It will be interesting to see where Ackman goes with his Robin Hood Investors Conference. It would also be interesting to learn who is privy to Ackman's presentation and see if they've made any investments based on that information.
    1 Nov 2013, 08:20 AM Reply Like
  • Let me get this straight:

     

    1. This short thesis was brought to Ackman by a research boutique. I think it's safe to assume that they must have done at least one month of research on the company before presenting it.
    2. Ackman then does about another year of research before making his presentation and taking his short position.
    3. It has been ten months since his presentation.

     

    This adds up to almost Two Years worth of time and he still needs to find things out about the company. How blatant can this so called fraud be if after two years he still needs to uncover more? If he was so convinced when he initiated this position why the need for additional information? One can only conclude that his thesis may need a fine tuning? If so, that's pretty sad for something he called a Conviction trade.
    31 Oct 2013, 05:36 PM Reply Like
  • For sure Ackmans accusations have had something positive for herbalife and that is the build it better initiative. But to believe that the company will be shut down, from my perspective is naive. This Ackman guy has no clue of the tremendous impact the product and the business is having for people around the world; the momentum is accumulating like never before.

     

    I believe that investors tend to lose sight of what a few hundred dollars extra a month can do for the majority of the people. I tell you what a lot of money means to most people, making double of what they make now. And thats whats really easy to do with herbalife, and the more time passes by, the easier it will get, that is because the training methods are improving, the build it better initiative will cover whataver loopholes might exist, and the market for a healhy active lifestyle is bigger than ever.
    31 Oct 2013, 07:13 PM Reply Like
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