Herbalife Ltd. (NYSE: HLF)
There’s no denying the fact that Herbalife and activist investor Bill Ackman are in the midst of a long, drawn out battle. Years ago, Ackman made a billion dollar bet against the company, stating that it was a pyramid scheme and that it would crumble to ashes. Since then, the companies have been at odds, and in some cases, in court. Nonetheless, HLF just unleashed a series of videos about Bill Ackman and his motives. Today, we’ll talk about the videos, what we’re seeing in the market as a result, and what we can expect to see from the stock ahead. So, let’s get right to it…
HLF Launches Video Attack In The Battle Against Bill Ackman
As mentioned above, Herbalife recently launched a video series informing investors of who Bill Ackman is and his many shortcomings as an investor. This is the latest in a long string of hypothetical bombs dropped from one party to another in this battle.
The first in the video series, designed to discredit and cause questions with regard to Bill Ackman, “Frequently Wrong, Always in Denial” was published earlier today. In the video, HLF shows that Bill Ackman has an inherent inability to admit the many mistakes that he’s made as an investor. The one minute and 14 second video is a list of quotes from mainstream media, all of which take a negative view of Ackman as an investor. It seems as the goal of the video is to show investors that Ackman knows that he is wrong, but he simply will not admit it. In fact, one of the quotes that stuck out to me the most came from Dr. Steve Sjuggerud of Daily Wealth on March 2016. Here’s what he had to say…
“Ackman wanted to prove that he was right… More than he wanted to protect the investor money entrusted to him.
Another big quote outlined in the HLF video came from a post by Alexandra Stevenson and Julie Creswell that was published in the New York Times. Here’s what they had to offer…
“Some hedge fund executives wonder whether Mr. Ackman has lost his perspective on Herbalife, allowing it to become a personal vendetta.”
If you would like to see the full video, click here. Nonetheless, along with the release of the video, EVP of global corporate affairs at HLF had the following statement to offer…
As we approach the four year anniversary of Bill Ackman’s unprecedented market manipulation campaign, a campaign that Bill Ackman admitted is costing him approximately $100 million annually in just carrying costs, it is important to point out that numerous respected journalists and industry experts have concluded his self-serving activism and hubris appear to be clouding his judgement, just as it has in the past.
For close to four years, Bill Ackman has launched a well-funded, aggressive market manipulation campaign, filled with false statements, to support his reckless $1 billion bet against Herbalife. In addition to the investment loss for his investors, Bill Ackman said his carrying costs were approximately $100 million annually, which when combined with more than $75 million he has spent on lobbying and public relations, adds up to real money.”
How The Stock Reacted To The News
As investors, we know that the news moves the market. At this point, it seems as though investors are happy that the company has decided to stand up for itself once again. As a result, the stock is trading upward. Currently (2:15), HLF is trading at $62.70 per share after a gain of $2.20 per share or 3.64% thus far today.
What We Can Expect To See Moving Forward
Moving forward, HLF has some challenges ahead, but at this point, I don’t think Bill Ackman will be one for much longer. Overall, his claims have been debunked and investors are ready to start moving forward. Whether or not Ackman decides to move forward is up to him. While Herbalife is being forced to change its compensation structure, the company will likely do so and do well in the long run. At the end of the day, even a nearly half a billion dollar campaign was launched to take this company out and they lived through it. HLF is a strong company that will likely see long run growth.
What Do You Think?
Where do you think HLF is headed moving forward? Join the discussion in the comments below!