Herbalife (HLF -16%) plummets after David Einhorn reportedly questions the company's disclosures...

Herbalife (HLF -16%) plummets after David Einhorn reportedly questions the company's disclosures during the earnings conference call.
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Comments (8)
  • deercreekvols
    , contributor
    Comments (9849) | Send Message
    The Einhorn Playbook states that if you are short a position and in danger of losing money, question said company's disclosures and cover your short.


    Same strategy, different company. GMCR should ring a bell with some folks.


    What a way to make a living. The Big Red of Cornell are not proud of this graduate, in my opinion.
    1 May 2012, 01:07 PM Reply Like
  • alx.botelho
    , contributor
    Comments (64) | Send Message
    A lot of volume. Sellers will dry out today. Time to buy some more and wait for the company to defend itself before the market opens tomorrow. Its a quality stock.
    1 May 2012, 01:22 PM Reply Like
  • SA Editor Stephen Alpher
    , contributor
    Comments (563) | Send Message
    Or better yet, an announcement from Einhorn that he's not short and was just asking questions!
    1 May 2012, 01:24 PM Reply Like
  • deercreekvols
    , contributor
    Comments (9849) | Send Message
    This will never happen. He clearly has an agenda, just as he did with GMCR.


    When one man can move a stock like this, something is terribly wrong with the way things are done.


    A banner day for Mr. Einhorn. HLF is left wondering what the hell happened.
    1 May 2012, 01:41 PM Reply Like
  • glssmrbl
    , contributor
    Comments (1315) | Send Message
    I'm glad you have confidence. It doesn't make sense for a stock to fall that far on disclosure uncertainties. Unless they think half has been lying about the last earnings report
    1 May 2012, 10:27 PM Reply Like
  • Bhoffman617
    , contributor
    Comments (2) | Send Message
    Always been a fan of HLF, first started following last april and then the stock doubled. Is this an opportunity to initiate a long position or is it better to let the water settle before sticking my toes in
    1 May 2012, 02:18 PM Reply Like
  • Afam Edozie
    , contributor
    Comments (255) | Send Message
    In the multilevel marketing game, the distributor is the customer (mainly.) I don't know the percentages, but what happens is many users become distributors (but find its no route to instant riches and requires selling skills to succeed - surprise, surprise) they end up buying only for their own consumption (and the odd sale) but get a discount. This is not a problem, because the amount of discount is related to sales volume, and his upline continue to get commission on his (or her) consumption.


    Unless I'm missing something, I don't see the big deal.
    Cash flow from operations up 11.5% (I would have liked more but not bad)
    Inventories up 1%
    Receivables up 20%
    Revenues up 21%
    Gross profit up 21.5%
    EPS up 25.7%


    The company was selling at a TTM PE of 21 and PEG of 1.0
    Visibility on its revenue growth is good going forward a few years.


    Could someone please let me know what I'm missing.


    Disclosure: Been long HLF since Nov, took half profit in March, but stayed net long, was planning to load up after the conference call
    1 May 2012, 04:05 PM Reply Like
  • alx.botelho
    , contributor
    Comments (64) | Send Message
    Company's official response to the selloff:


    "We believe the drop in Herbalife's stock price today is a buying opportunity given the strong business fundamentals and our outlook for ongoing success. We currently have $428 million in repurchase authorization."
    1 May 2012, 05:02 PM Reply Like
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