Herbalife: What Now?
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December 27, 2012 - 2:14am
Herbalife is Not a Fraud, But It May Be a Pyramid Scheme
Investing Daily Article of the Week
by Jim Fink, Investing Daily
Herbalife (NYSE: HLF), the direct marketer of diet shakes and energy bars, lost 35% of its value last week on news that hedge fund manager Bill Ackman is shorting the stock. In a Bloomberg interview and in a 343-slide presentation delivered at an Ira Sohn Conference “special event,” Ackman’s attack on Herbalife is the most blistering and hostile I have ever seen a shortseller make, including sound bites like the following:
“We are short more than 20 million shares”
“Our target price is zero, because we think the business will fail”
“This is the highest conviction I have ever had about any investment I have ever made.”
Herbalife’s profits are “blood money” taken from low-income Herbalife dist...
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