Mon, Apr. 6, 9:19 AM
- Herbalife (NYSE:HLF) eases 5% premarket on average volume in response to the news that federal law enforcement agencies have queried ~10 members of the company's top-level distributors about their business practices. The specifics of the interviews or the identities of the individuals are not known at this point. According the company, it has offered legal counsel to those involved.
- The company is under scrutiny for its marketing practices from various law enforcement groups. Short seller Pershing Square maintains that it operates an illegal pyramid scheme.
Mon, Apr. 6, 9:18 AM
Tue, Mar. 17, 6:54 PM
- California federal judge Dale Fischer has thrown out a shareholder class-action suit accusing Herbalife (NYSE:HLF) of running a pyramid scheme, arguing there was no evidence the company had made disclosures to investors that caused its shares to fall.
- Fischer rejected the plaintiffs' argument that a Dec. 2012 presentation from Bill Ackman's Pershing Square Capital calling Herbalife a pyramid scheme was a corrective disclosure. "The [amended complaint] and plaintiffs’ related arguments are insufficient to compel the conclusion that the Pershing presentation was based on previously unavailable information or that the information could not be understood absent expert analysis."
- "What I heard from plaintiff counsel was 'Ackman, Ackman, Ackman'," said Herbalife attorney Jonathan Dickey at a hearing earlier in March. He argued the plaintiffs, who also alleged Herbalife published false financial statements and hid attempts to pressure members to buy more products from distributors, "slavishly copied from the Ackman accusations."
- Herbalife has risen to $36.24 AH.
- Earlier: Consumer group protests Herbalife's $17M distributor class-action settlement
Fri, Mar. 13, 5:40 PM
Fri, Mar. 13, 1:46 PM
- The public affairs firm that Pershing Square's Bill Ackman hired to advance his views that Herbalife (HLF +7.7%) runs an illegal pyramid scheme, Global Strategy Group (GSG), declares that it is not the subject of a federal investigation. In a statement, GSG says, "It is our clear understanding that we are not a target of any investigation and we are confident that all our work surpasses the highest legal and ethical standards. We spoke with the government and provided full transparency into all of our efforts. GSG has never made false statements about Herbalife nor do we believe anyone else has either."
- In an interview on CNBC this morning, Mr. Ackman said that Pershing Square hired GSG who, in turn, hired subcontractors around the country. His understanding is that the FBI interviewed a "handful" of the subcontractors.
- The probe is investigating whether certain individuals made false statements about Herbalife's business model to federal officials and regulators in order to incite a federal investigation into the company and manipulating HLF's stock price.
- Previously: Herbalife +5%; Feds reportedly interview Ackman hires in manipulation probe (March 12)
Thu, Mar. 12, 6:39 PM
- The WSJ reports the FBI and prosecutors within the Manhattan U.S. attorney's office are "probing potential manipulation" of Herbalife (NYSE:HLF) shares, and have interviewed people hired by (drumroll...) Bill Ackman.
- Prosecutors are reportedly "looking into whether people, including some hired by Mr. Ackman, made false statements about Herbalife’s business model to regulators and others in order to spur investigations into the company and lower its stock price."
- Public statements and allegations passed on to regulators by Herbalife critics are being studied, as are connections between those critics and Ackman, who has taken a $1B short position against Herbalife.
- The paper cautions "neither Mr. Ackman nor Pershing Square has been served with a subpoena or been visited by FBI agents in connection with the probe." A spokesman for Ackman's Pershing Square Capital insists the firm has been "completely transparent about our position and our research," and acted lawfully.
- Herbalife has jumped to $34.90 in AH trading.
- Previously: Ackman predicts Herbalife will collapse in a year
- Previously: Ackman calls Herbalife a pyramid scheme in interview
- Previously: Pershing posts new Herbalife-bashing video
Thu, Feb. 26, 4:21 PM
Tue, Feb. 10, 10:32 AM
- Herbalife (HLF -3%) bucks the market's up move this morning as investors react to the Venezuelan government's announcement that it will unveil a new currency exchange system today at 10:30 am ET that will result in a significant devaluation of the bolivar.
- The current three-tiered system sets the bolivar/dollar exchange rate at 6.3 for food and medicine and 12 and 52 for other goods through Sicad 1 and Sicad II. The black market exchange rate is 190 bolivars per dollar. Observers think the exchange rate will settle out at 120 - 140 bolivars once the new systems opens.
- Herbalife generates ~15% of its revenues from Central/South America including ~5% from Venezuela. Pershing Square's Bill Ackman says that the company has been using the 6.3 bolivar/dollar exchange rate in its accounting of sales from that country, thereby artificially inflating its actual revenue.
Mon, Jan. 5, 4:34 PM
- Today's sell-off wasn't kind to Herbalife (NYSE:HLF) as it dropped 12% on a 67% spike in volume. Shares have plummeted more than 60% over the past year.
- The company's fundamentals continue to deteriorate. Sales growth, earnings and cash flow from operations have all slowed. Guidance has also weakened. Updated 2014 numbers are: volume point growth: 2.7 - 3.5% from a high of 8 - 10%; net sales growth: 3.5 - 4.3% from a high of 10 - 12%; diluted EPS: $5.80 - 5.90 from a high of $6.17 - 6.32.
- 2015 Guidance: volume point growth: 0 - 3%; net sales growth: -1 - 2%; diluted EPS: $5.45 - 5.75.
- Zacks Investment Research downgraded the company on December 30 to Strong Sell based on its lower-than-expected Q3 results and weaker outlook.
Nov. 4, 2014, 12:44 PM
Nov. 4, 2014, 9:15 AM
Nov. 4, 2014, 6:59 AM| 2 Comments
Nov. 3, 2014, 5:38 PM
Oct. 20, 2014, 9:01 AM
- At last report, Herbalife's (NYSE:HLF) biggest sell-side bull had exited DA Davidson and was rumored to maybe be joining Bill Stiritz who was then musing about an LBO of the company.
- Now at Pivotal Research, Tim Ramey starts Herbalife with a Buy and price target of $110. "If our job as analysts is to assess risk, quantify upside, and understand the downside, there is perhaps no better example of 'alpha' in the stock market today than Herbalife."
- Shares +2.75% premarket
Oct. 7, 2014, 2:35 PM
- Herbalife (HLF -2.7%) has been under investigation for months about whether it's operating as an illegal pyramid scheme, and senior executives at the company, tell Fox News it's a near-certainty the company will avoid the death penalty, though some action - perhaps a mix of fines and sanctions - remains a distinct possibility.
- Herbalife insiders note the FTC - when it sees illegal multi-level marketing schemes at work - has moved quickly to shut a number of them in recent years. The fact that no action has yet been taken gives the executives another level of confidence the company will survive.
Sep. 22, 2014, 3:50 PM
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