Recently, there’s been quite a bit of tension between Herbalife (HLF) and Bill Ackman; a respected activist investor and short-seller. Today, those tensions heated up quite a bit as Ackman called Herbalife (HLF) a “criminal enterprise” on CNBC. Ackman cited recent FBI interviews as his reasoning for the name calling. So, today we’ll take a look at why Ackman is calling Herbalife (HLF) a Criminal Enterprise, how the company’s stock price reacted to the news, and what we can expect to see from Herbalife (HLF) stocks in the near future. So, let’s get right to it.
Bill Ackman Calls Herbalife (HLF) A Criminal Enterprise
In an appearance on CNBC this morning, Ackman told Scot Wapner that some of the firms that he hired to help look into government relationships and lobbying at Herbalife (HLF) had been interviewed by the FBI. In his interview, Ackman had the following to say…
“My understanding is that some of their, I think a handful of their people that they’ve hired or that work for them, have been interviewed by the FBI…I have no idea what questions were asked. I have no idea what answers were given.”
Is The FBI Really Investigating Herbalife (HLF)?
During the Interview on CNBC, Wapner announced that he had also reached out to his sources to see whether or not the FBI really is investigating Herbalife (HLF). According to Wapner’s sources, FBI investigations into Herbalife (HLF) are ongoing and have been happening since last summer.
Ackman’s Ongoing Fight With Herbalife (HLF)
To date, Ackman has spent quite a bit of money in his fight against Herbalife (HLF); he estimates the total amount of money to be around $50 million “most of which went to legal fees”. Another major expense Ackaman said he’s taken on in the fight was investigation. Through the use of hidden camera’s and recording devices; private investigators hired by Ackman compile data about the company’s distribution centers and nutrition clubs. While Herbalife (HLF) representatives claim that this battle is waged by Ackman in an attempt to enrich himself, Ackman says that couldn’t be further from the case.
Investors Don’t Seem To Care About What Ackman Has To Say
While I’m sure that Ackman’s ultimate goal behind the interview was to discredit Herbalife (HLF) as a company, it seems to have done the exact opposite. All of the publicity surrounding the news has brought Herbalife (HLF) as a company back into the spotlight and into the eyes of investors. As a result, the company’s stock is soaring today. Currently (4:00), Herbalife (HLF) stocks are trading at $35.96 per share after a gain of 8.15% so far today.
Will Herbalife (HLF) Stocks Continue Growing?
While the strong trend seems to be over, I think we’re going to continue to see slow, but stead growth in the long run from Herbalife (HLF) stocks.
What Are Your Thoughts?
Do you think Herbalife (HLF) stock will continue to grow? Why or why not? Let us know in the comments below!