SAN DIEGO (TheStreet) -- If the 25% rise in Herbalife's (HLF - Get Report) stock proves nothing else, it's that the market hates "anticappointment," as one friend puts it, referring to hedge fund billionaire activist Bill Ackman's highly promoted multi-hour presentation Tuesday on Herbalife.
Having spent 10 months investigating Herbalife for the CNBC.com documentary, "Selling the American Dream," I can say with some level of authority: There's no question that the findings by Ackman's team, after two year's of investigating, is solid. (I know what we found; they have gone well beyond that.)
In short, they alleged (actually, they stated as fact) that the company's nutrition clubs engage in phony sales to phony customers.
It was good stuff, but it lacked the obvious hammer-over-the-head "gotcha," such as an internal document that would prove, beyond a shadow of a doubt, that Herbalife is a pyramid scheme.
Herbalife, in a press release, as if written by a Crisis PR 101 class, didn't come right out and deny Ackman's allegations; instead it said he "overpromised and underdelivered."
Reality: The details were drowned out by the stock, and in markets like these all anybody cares about is the stock, as if it's judge and jury. It isn't, and questions about Herbalife's model are justified and overdue. But at the risk of sounding like a broken record -- the stock will do what the stock will do until regulators either give Herbalife the "all clear" or confirm what Ackman has been saying. That's really all that matters.
-- Written by Herb Greenberg in San Diego
09/18/14 - 09:34 AM EDT
09/16/14 - 12:22 PM EDT
09/12/14 - 12:06 PM EDT
09/09/14 - 11:27 AM EDT
09/08/14 - 01:00 PM EDT
02/05/16 - 21:00 PM EST
02/05/16 - 21:00 PM EST
02/05/16 - 08:53 AM EST
02/04/16 - 19:39 PM EST
02/04/16 - 14:07 PM EST
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
Trifecta Stocks analyzes over 4,000 equities weekly to find the elite 1% of stocks that pass rigorous quantitative, fundamental and technical tests.
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
Chris Versace, using sophisticated stock screening and fundamental research, identifies potentially explosive small and mid-cap stocks.
Master swing trader Alan Farley uses his sophisticated software screens to review thousands of stocks each day for you, to find just the handful that meet his demanding criteria.