This blog entry is my own personal opinion, not those of any company I work for or represent. I have no position or stake in HLF stock or options currently.
Going back 20 years, I remember Herbalife (NYSE:HLF) infomercials and knew a bit about it. It was always a MLM pyramid type "scheme" to me.
Then they get a former Disney President as their CEO in 2003 and now many on Wall Street consider this a legitimate company/stock.
A massive short squeeze is going on, as a major short went public late last year and major traders (not long-term investors) like Soros and Icahn are squeezing this to the upside big time.
Latest data I see shows about 30 mil shares short on 100 million outstanding -- that's a lot of potential for a squeeze.
Do I think this should be a "legit" $6 billion dollar market cap company -- absolutely not.
But the short-term potential for upside is still large here due to momentum and the short interest. Long-term (2 years + out) I would have to rate this as a major sell (assuming all Pyramids eventually collapse of their own weight and also assuming some governments around the world may wake up to this company's practices). Having faith in ethical government is questionable too, however...
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.