Mr. Pink's Picks: selected event-driven value investments Message Board

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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments

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From: StockDung	5/22/2014 7:53:36 AM
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Selling snake oil? In an email, fund manager Vijay Marolia told ValueWalk that he believes a “Snake Oil” salesman started Herbalife Ltd. ( NYSE:HLF) and that its “entire business model is based on recruiting new snake oil salesman [sic].” He also explained why he sides with Bill Ackman rather than Carl Icahn. “If there’s one thing you can count on regarding Bill Ackman, it’s this–he has done some intense due diligence,” Marolia told ValueWalk. “If there’s [sic] two things you can count on regarding Carl Icahn, one is that he has NOT done nearly as much DD, and two, his main motivation is rooted in revenge. He’s trying to get back at Bill for the whole ‘shmuck insurance’ ordeal.” Why hasn’t Herbalife settled the issue? Marolia also points out that Herbalife Ltd. ( NYSE:HLF) could put an end to all the debate very quickly if it wanted to. Ackman has repeatedly called the nutritional supplements company a pyramid scheme. One of the things regulators may be considering in their investigation is how much of Herbalife’s sales are to end customers outside its membership. He believes if the company just disclosed details about its retail sales, the fight would be over. He also questions whether it’s “really cheaper to burn millions on lobbying.” The hedge fund manager also had some critical comments for regulators, saying they’ve been “embarrassed repeatedly for being asleep at the wheel” and that their investigation is now their “chance to save face.” valuewalk.com

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