HLF - Herbalife

[Liberty]

Did he just call HLF CEO Michael Pearson?

 

Slip of the tongue. Not surprising because he probably spends his days thinking about Valeant and Herbalife, and the CEOS are called Michael Johnson and Michael Pearson. Immediately corrected himself and joked about it.

[siddharth18]

"My grandfather was a successful mortgage broker..." and "I'm a huge beneficiary of this country..."

 

***tears in his eyes***

 

"Shut it down Michael Johnson!"

 

 

Is that the death-blow? Tears in his eyes? Mixing emotions with business?

 

 

Why did he have to call it the "most important presentation of his life" ? It tells us more about his life, than it tells us about HLF or the presentation...

 

 

59.93

+5.91 (10.94%)

[writser]

uh....fail?

 

So far, definitely. Boring.

[LC]

Did he just call HLF CEO Michael Pearson?

 

He corrected himself for 1 of few moments of levity.  "Big lies were told by the Nazis" (and Herbalife), another great quote.  Ackman says Bill Stiritz' company Post hired bullish analyst Tim Ramey after fired by DA Davidson in Jan 2014.

 

I only heard the last 15 minutes of the presentation. But this part seemed the sketchiest to me, as well as the details of the buyback.

[hardincap]

Did he just call HLF CEO Michael Pearson?

 

He corrected himself for 1 of few moments of levity.  "Big lies were told by the Nazis" (and Herbalife), another great quote.  Ackman says Bill Stiritz' company Post hired bullish analyst Tim Ramey after fired by DA Davidson in Jan 2014.

 

I only heard the last 15 minutes of the presentation. But this part seemed the sketchiest to me, as well as the details of the buyback.

 

Dont you think its far more likely that Stiritz is seriously exploring a possible LBO deal? He hinted as much even before hiring Ramey. 

[sswan11]

Dont you think its far more likely that Stiritz is seriously exploring a possible LBO deal? He hinted as much even before hiring Ramey.

 

That's the speculation but others argue HLF is now too levered.

[sswan11]

Ackman claiming Icahn didn't do his due diligence when he bought HLF.

[Vish_ram]

Stiritz may see a strategic fit with HLF. He can use the HLF distributor network to sell/consume POST cereals. That adds one more meal. Now to make it a full circle, Stiritz can acquire Nutrisystem and provide dinners too.

 

[siddharth18]

http://blogs.wsj.com/moneybeat/2014/07/22/ackmans-deathblow-fails-to-knock-out-herbalife/

[TwoCitiesCapital]

I watched the whole thing. Definitely missed an atomic bomb type of announcement that I was expecting from the hype.

 

I do think that the evidence was pretty damning in that the company knows what's going on, and what's going on is that they are pushing the expansion opportunity and not selling the product. I thought that this was the main distinction that the law made between MLM co's and ponzi schemes.

 

 

[Liberty]

The more I learn about this company, the sadder I think the situation is. They're creating so much human misery by cynically manipulating people. I think Ackman's right, but it doesn't mean that he'll win soon. IMO HLF is going to zero because it's not a real business, it's clearly a pyramid scheme sustained by recruiting, not by products. But it could take week, months, years. Who knows?

[randomep]

The more I learn about this company, the sadder I think the situation is. They're creating so much human misery by cynically manipulating people. I think Ackman's right, but it doesn't mean that he'll win soon. IMO HLF is going to zero because it's not a real business, it's clearly a pyramid scheme sustained by recruiting, not by products. But it could take week, months, years. Who knows?

 

I don't know how the verdict will play out, but Ackman has conviction like I have never seen in a human being.

[Grenville]

The more I learn about this company, the sadder I think the situation is. They're creating so much human misery by cynically manipulating people. I think Ackman's right, but it doesn't mean that he'll win soon. IMO HLF is going to zero because it's not a real business, it's clearly a pyramid scheme sustained by recruiting, not by products. But it could take week, months, years. Who knows?

 

I'm a bit confused why Bill Stiritz has such a huge position in Herbalife. He must not agree with Ackman. It would be nice to hear his thoughts on Herbalife given his role at Post Foods.

 

http://www.forbes.com/sites/nathanvardi/2014/07/22/bill-ackmans-big-herbalife-reveal-bombs-with-investors/

Ackman highlighted the fact that William Stiritz, who personally owns a big stake in Herbalife, is the CEO of Post Foods and said it was “striking” if Post Foods was spending money to help Herbalife. At the same, Ackman called Stiritz one of the “great CEOs of all time,” adding that he had asked to meet with Stiritz but Stiritz had declined. Ackman pointed out that a business book that he feels is important and that he used to promote his backing of Valeant Pharmaceuticals hostile takeover effort of Allergan highlights Stiritz’s business career.

[topofeaturellc]

High conviction on Pre-Paid Legal too!!!

[LC]

The more I learn about this company, the sadder I think the situation is. They're creating so much human misery by cynically manipulating people. I think Ackman's right, but it doesn't mean that he'll win soon. IMO HLF is going to zero because it's not a real business, it's clearly a pyramid scheme sustained by recruiting, not by products. But it could take week, months, years. Who knows?

 

I agree. I think it will take years for the level of misery caused to failed distributors to outweigh their promotional schemes. But then again, maybe with enough publicity, the gov'ts where HLF does business will take notice. Not holding my breath, though.

[ZenaidaMacroura]

The more I learn about this company, the sadder I think the situation is. They're creating so much human misery by cynically manipulating people. I think Ackman's right, but it doesn't mean that he'll win soon. IMO HLF is going to zero because it's not a real business, it's clearly a pyramid scheme sustained by recruiting, not by products. But it could take week, months, years. Who knows?

 

I don't know how the verdict will play out, but Ackman has conviction like I have never seen in a human being.

A conviction matched by every person who goes to an MLM general meeting (ACN in Houston for example).  Without the slightest hyperbole- those things are cult like

[Liberty]

High conviction on Pre-Paid Legal too!!!

 

Not exactly. He said he wasn't the one who made the investment in that company at the time he was at Gotham Partners, and he explained what the thesis was at the time.

[topofeaturellc]

High conviction on Pre-Paid Legal too!!!

 

Not exactly. He said he wasn't the one who made the investment in that company at the time he was at Gotham Partners, and he explained what the thesis was at the time.

 

LOL. OK.  And the original MBIA thesis?

[Liberty]

LOL. OK.  And the original MBIA thesis?

 

I have no idea what you mean.

[AZ_Value]

The more I learn about this company, the sadder I think the situation is. They're creating so much human misery by cynically manipulating people. I think Ackman's right, but it doesn't mean that he'll win soon. IMO HLF is going to zero because it's not a real business, it's clearly a pyramid scheme sustained by recruiting, not by products. But it could take week, months, years. Who knows?

 

I don't know how the verdict will play out, but Ackman has conviction like I have never seen in a human being.

 

As far as conviction goes, you've gotta give it to the guy, he has plenty of that. Ever since I read Confidence Game, I've always wondered if there is anyone else even capable of pursuing a short like that, he almost went broke over MBIA, multiple run ins with Eliot Spitzer but was never deterred.

 

When looking at the persistence with which he pursues an idea when he decides to short, there's one quote that keeps coming to mind.

I think it was comedian Bill Maher who said it about Mitt Romney, after he finally got the Republican nomination that he had pursued for so many years. He said something like "So after all of this primary drama, it's gonna be Mitt Romney, a guy who has pursued this nomination with the single minded viciousness of an autistic Rottweiler"

That's how I picture Ackman when he decides to go after a company he's shorting.

[topofeaturellc]

go look at what his original thesis was on MBIA.  Its not what you probably think it was.  Actually at the time he started in on it they hadn't even taken the risks that would end up blowing them up.

 

And one of the guys at a two PM shop disclaiming responsibility for an idea that got them in front of the NY AG just lacks any reasonable credibility. 

 

Its funny - I still think HLF is scam

 

[siddharth18]

With the reaction post presentation today, I want to know what sort of hyperbole Ackman will have to use to rally troops to see his next presentation. I mean it's hard to top the "most important presentation of my life" and "Enron."

 

 

Unless this was his last presentation.

[writser]

Must be a very powerful feeling to see a stock move 20% directly after you give a presentation about it. If it moves the desired way, that is  ;) .

[hardincap]

ackman's mistakes today:

 

1) incoherent, unnecessarily long presentation. 3+ hours!

2) set exceedingly high expectations and failed to deliver

3) no exit strategy - he exhausted his credibility and doesnt have any left for the next presentation

 

you cant ever count ackman out, but today was pretty much another nail in *his* coffin, not herbalife's

[siddharth18]

I'd think that it's gotta be a lot of shorts, who joined Ackman's bandwagon and were hoping to coattail on his thesis, that are now covering. IMO this presentation did more to weaken the short thesis rather than bolster the bull thesis. And for most bulls, the weakness of bear thesis (ie: status quo is maintained, HLF isn't stopped) is itself the bull thesis.