‘Herbalife Is Definitely Settling’ And 4 Other Potentially Extremely Dangerous Myths

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  • Herbalife moved more than 20% higher on Friday, adding over $1 billion in enterprise value.
  • The market has the message that the company is definitely in settlement talks with the FTC and that an injunction or asset freeze is off the table.
  • This is dangerous thinking as a result of a mass misinterpretation of the company’s disclosure and an uninformed analyst interview that played at noon Friday on CNBC.
  • QTR debunks 5 important myths you must read if you’re long HLF.

It’s my belief that Friday’s stock move in Herbalife (NYSE:HLF) was nothing more than the financial media not being able to accurately parse out what’s going on with the company, but for the nice job the “Halftime Report” panel did in debunking Tim Ramey’s overly optimistic misinformed hubris, which we will touch on at length.

I believe a fundamental misunderstanding of where the facts sit currently is the main cause for this run up. And while the market may be right – certainly there are some good options on the table, according to the company – I think there is an unnoticed case for the stock being decimated that many buying on Friday may not even be able to imagine.

After performing research throughout most of the weekend so far, I have come to realize that there are five very dangerous myths that have come to dominate the narrative surrounding the company right now. These myths have given the market the misunderstanding that the company is definitely in settlement talks with the FTC, and that there is no further risk inherent aside from that.

In an effort to inform investors, I want to lay out the actual facts by debunking these myths directly so that all investors have some clarity as to what the state of the company’s negotiations or “discussions” with the FTC are – and then some.

Continue to rest of the article: http://seekingalpha.com/article/3937666-herbalife-definitely-settling-4-potentially-extremely-dangerous-myths

03/03/2016 |

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