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Herbalife Ltd. (HLF)

  • Jul. 30, 2014, 12:11 PM
    • Former VP in the director and officers group at Hartford Financial (HIG -0.3%) William Kelly says the insurer let him go after he told a reporter Herbalife (HLF -3%) had approached Hartford about purchasing a so-called directors-and-officers insurance policy. This type of insurance covers legal costs when board members and senior execs get sued.
    • Kelly says Hartford ultimately decided not to provide Herbalife with the requested insurance.
    • Kelly's comments came on the sidelines of a presentation Bill Ackman was giving lambasting Herbalife.
  • Jul. 29, 2014, 12:15 PM
    • Herbalife (HLF -11.4%) CEO Michael Johnson spent a lot of time emphasizing the health benefits of the company's products, specifically the obesity-fighting benefits. He said that focusing on "wellness" and "fitness" will be the growth drivers going forward. It has invigorated the U.K. market, for example, by attracting a younger demographic into Nutrition Clubs.
    • Mr. Johnson is highly confident that the FTC investigation into Herbalife's business model will have a positive outcome. He stated that 97% of the product sold in the U.S. is consumed by the end user.
    • Over 13,000 people attended the company's recent Extravaganza in Chicago. Attendance was up 24% compared to 2013.
    • Average order in Mexico was down 60%, but increased volume of orders compensated.
    • Q3 guidance: non-GAAP EPS: $1.49 - 1.53.
  • Jul. 29, 2014, 9:08 AM
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  • Jul. 29, 2014, 8:25 AM
    • Shares of Herbalife (NYSE:HLF) are down almost 12% premarket on modest volume. Prices have  dropped ~$10 from yesterday's peak of $69.69 in response to its Q2 results that missed consensus views and lower revenue growth outlook.
  • Jul. 28, 2014, 5:36 PM
    • Top gainers, as of 5:15 p.m.: CGNX +18.5%. ARWR +7.7%. HLS +7.7%. MAS +5.8%. DRI +4.7%.
    • Top losers, as of 5:15 p.m.: HLF -11.2%. AFOP -10.5%. TTS -10.0%. PCL -3.6%. FOLD -3.3%.
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  • Jul. 28, 2014, 5:24 PM
    • Herbalife (HLF +2.2%) Q2 results: Total Revenue: $1,306.2M (+7.1%), North America: $250.6M (+1.2%), Mexico: $148.6M (+2.1%), South/Central America: $203.3M (-8.5%), EMEA: 227.3M (+22.0%); Asia Pacific: $306.3M (+2.4%), China: $170.0M (+43.9%); Operating Income: $196.3M (+2.0%); Net Income: $119.5M (-16.5%); Quick Assets: $773.5M (-9.0%); CF Ops: $347.6 (-1.1%).
    • Volume Points: North America: 335.8M (-1.2%), Asia Pacific: 320.2M (+1.0%); EMEA: 218.8M (+22.0%); Mexico: 231.3M (+5.2%); South/Central America: 206.3M (-7.3%), China: 118.5M (+38.0%).
    • Av. Active Sales Leaders: North America: 75,772 (+4.8%), Asia Pacific: 74,916 (+5.8%), EMEA: 56,692 (+18.1%), Mexico: 64,656 (+2.7%), South/Central America: 62,172 (+13.8%), China: 18,703 (+32.9%).
    • 2014 Guidance: Net Sales Growth: 8.5 - 10.5% from 10 - 12%; Diluted EPS: $6.17 - 6.32 from $6.10 - 6.30; Volume Point Growth: 6 - 8 % from 8 - 10%; CAPEX: $175M - 195M (unch); Effective Tax Rate: 27.5 - 29.5%.
    • HLF shares are down 11% AH on robust volume.
  • Jul. 28, 2014, 4:33 PM
    • Herbalife (NYSE:HLF): Q2 EPS of $1.55 misses by $0.02.
    • Revenue of $1.31B (+7.4% Y/Y) misses by $40M.
    • Shares -3.1%.
    • Press Release
  • Jul. 27, 2014, 5:35 PM
  • Jul. 25, 2014, 12:38 PM
    • Herbalife (HLF +0.3%) appoints Alan L. Hoffman to the newly-created position of SVP of Global Corporate Affairs reporting to Chairman & CEO Michael Johnson effective August 25, 2014. He joins the firm from PepsiCo where he is SVP for Global Public Policy responsible for policy development and external/government relations.
    • Mr. Hoffman was formerly VP Joe Biden's Chief of Staff and President Obama's Deputy Assistant.
    • Separately, SVP of Global Corporate Communications Barbara Henderson retires. She will assist with the transition to Mr. Hoffman and remain President of the Herbalife Family Foundation.
  • Jul. 22, 2014, 1:05 PM
    • Shares of Herbalife (HLF +14.8%) pop on a 5x surge in volume after investors regain confidence that the company "ain't done yet." In this morning's webcast, Mr. Ackman presented the findings of the investigation into the firm's Nutrition Clubs (NC) that Pershing Square sponsored. Unfortunately for shorts, there was little new information that would portend a collapse of the company. The investigative team looked into > 240 Nutrition Clubs in the U.S., Mexico and six other countries. There are > 37,000 NCs in Mexico that account for 75% of HLF's business in that country. Latinos figure prominently in Herbalife's growth.
    • Investigative reporter-cum-analyst Christine Richard was the person who gave Mr. Ackman the idea of shorting Herbalife. She led the investigative effort into the NCs. She says that the clubs make money via the "certification" process for aspiring NC owners. They work for free, must consume and pay for product each time they report to a club and must deliver at least 10 repeat customers to the teaching club before they are allowed to open their own. The total investment is ~$3,000 which is similar to the initial investment in inventory for Supervisor status, it's just spread out over time. Mr. Ackman asserts that the NCs use deceptive tactics and violate labor laws by forcing people to work for free.
    • According to the company, 33 - 41% of its earnings are derived from NCs. If they were to be shut down (by government action) the company would face a catastrophic collapse. Mr. Ackman believes the proportion is as high as 50% of earnings. He admitted that Canada is the only government that has looked into the situation thus far.
    • As a crowning touch at the end of presentation and prior to the Q&A, Mr. Ackman called Herbalife CEO Michael Johnson a predator and a criminal. He then got emotional as he described his immigrant ancestors' pursuit of the American Dream. Regrettably, the camera didn't pan the audience to see how many members were teary-eyed as well.
  • Jul. 22, 2014, 12:47 PM
  • Jul. 22, 2014, 7:02 AM
    • In an interview on "Bottom Line" yesterday, Bill Ackman declared he will show how Herblife's (NYSE:HLF) Nutrition Clubs are frauds similar to Enron's fake trading rooms reports Bloomberg. He confirmed that Pershing Square Capital Management has spent $50M of investors' money to prove the company is a pyramid scheme. He confidently stated, "Trust me, when you see the stuff we have you will conclude the money was well spent."
    • Herbalife plunged 11% yesterday. Shares are down another 4% premarket on light volume.
    • The webcast is scheduled for this morning at 10:00 EDT via
  • Jul. 21, 2014, 3:46 PM
    • The softness of Herbalife (HLF -11.3%) shares continues as the end of the trading day approaches. Shares are down on a 4x surge in volume.
    • In an attempt to set the tone for tomorrow's webcast by Pershing Square, the company issues a press release about its Nutrition Clubs. The bullets address the qualitative advantages/benefits for members but do not address the financial details, an area that was most certainly the focus in Mr. Ackman's investigation.
  • Jul. 21, 2014, 1:49 PM
    • Shares of Herbalife (HLF -6.2%) tank on a 2x surge in volume ahead of tomorrow's webcast at 10:00 am EDT by Bill Ackman's Pershing Square Capital Management. Mr. Ackman et al. will be presenting their findings from their investigation into the company's Nutrition Clubs.
    • Interested persons may access the presentation via
  • Jul. 18, 2014, 12:24 PM
    • At Herbalife's (HLF +0.7%) Extravaganza in Chicago, members hold a press conference to convey their displeasure over what they perceive as misstatements by Pershing Square Capital Management.
    • Pershing has scheduled another webcast for July 22 at 10:00 am EDT to discuss its investigation into Herbalife's Nutrition Clubs. Interested persons may access the event via
  • Jul. 17, 2014, 2:12 PM
    • Herbalife (HLF -1.2%) publishes an updated refutation of Pershing Square's statements questioning its business model and the satisfaction of its many distributors.
    • The company has created a website,, where Herbalife customers and distributors share their positive experiences.
    • The last statement in the main body of the press release concisely sums up its opinion of the affair: "Ultimately, Pershing Square's campaign is based on propaganda, and we look forward to demonstrating that its assumptions will crumble under serious and independent scrutiny."
HLF vs. ETF Alternatives
Company Description
Herbalife, Ltd., is a global nutrition company that sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products as well as personal care products.