Herbalife: What Now?

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...