Why Herbalife Ltd. Stock Bounced Today

Is this meaningful? Or just another movement?

Jul 22, 2014 at 4:06PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Herbalife Ltd. (NYSE:HLF) were looking healthier today, jumping as much as 26% after the market rejected Bill Ackman's short-selling presentation today. 

So what: Shares of the nutritional supplement seller dropped 12% yesterday after Ackman, the head of Pershing Square Capital Management and an Herbalife short-seller, promised to deliver a "death blow" to the company in a presentation exposing it as a "massive fraud" today. However, that didn't happen. In his argument, Ackman said the company's hiring practices violate U.S labor law, and he again called the multi-level marketer a "pyramid scheme," insisting that sellers make more money for recruiting new members than selling the actual product. Herbalife once again emphatically denied Ackman's claims in a press release following the presentation.

Now what: In its response, Herbalife noted that Ackman reaffirmed that "Herbalife is first and foremost a company with great products that people want," and that millions of customers choose its products. Continuing on, the company said Ackman again "over-promised and under-delivered in his presentation, and merely showed that the facts were on Herbalife's side. As the stock's jump shows, investors clearly agreed, rejecting Ackman's thesis. This saga is far from over as Ackman earlier this year convinced the DOJ to investigate Herbalife, but Herbalife has won this battle, and next time Ackman calls for Wall Street's attention, he likely won't have as much sway.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool has the following options: long January 2016 $57 calls on Herbalife. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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