Herbalife (HLF) Chief Financial Officer John Desimone is suggesting his company may file suit against Bill Ackman after yesterday’s three-hour circus. If we were running Herbalife, we’d take an Ackman show every day if it added 25 percent to the market value.
When emotions get in the way of seeing clearly and keeping you in a position that doesn’t care how deeply you feel about being right -- you’ve got to get out of that trap. Ackman appears trapped, and yesterday was hoist by his own petard.
The big reveal on Herbalife he promised, the “death blow,” was more of the same selected bits of information that often follows multilevel marketing companies but which, when finished, left us humming Peggy Lee’s “Is That All There Is?”
Could he not see this himself? This is what $50 million bought?
The difference between Geraldo Rivera’s flop with Al Capone’s vault and Ackman’s spectacle yesterday is that at least Rivera didn’t really know what was in there. But Ackman went up on stage anyway, and even got close to tears at one point. Again.
Chris Nagi, managing editor for stocks coverage, questioned whether Ackman’s ferocity in this saga is “legitimately aberrant behavior” or “what would normally be the mechanics of activism.” (In fairness to Nagi, the crying part didn’t come up.)
Perhaps one unintended benefit to the Herbalife show is that it’s keeping the Valeant-Allergan deal under the radar, Nagi says.
“The Valeant-Allergan thing is enormous hedge fund money,” he says, noting that Ackman’s Pershing Square has about $4 billion on the line. “That’s one of the great hedge fund trades in the history of the industry and also one of the most creative. Whereas this thing (Herbalife) is mostly a garden-variety short.
‘‘All anyone’s looking at now is the alleged beating that he’s taking on Herbalife. A vastly more significant amount of money and bigger payday is now leaving the headlines, is now no longer the focus of everyone.”
Just you wait.
There are no important economic indicators today but a ton of U.S. earnings: B/E Aerospace, Boeing, Dow Chemical, General Dynamics, Biogen Idec, Simon Property, Whirlpool, Pepsi and Norfolk Southern before the bell. Qualcomm, Gilead, Citrix, ETrade, CA, AT&T, Sallie Mae and Facebook after the bell. Among non-U.S. earnings, reports are due from Wal-Mart de Mexico, Baidu, Akzo Nobel, ABB, Daimler, GlaxoSmithKline and Iberdola.
A short time ago, the Bank of England said some members of its Monetary Policy Committee have started to argue that the risks to a rate increase are dropping.
- John Kerry defied the FAA ban on flights to Tel Aviv and ordered his U.S. Air Force jet to land there anyway for his mediation talks with Netanyahu, Abbas and Ban. - Deutsche Bank shares have dropped as much as 2.8 percent in Frankfurt following a Wall Street Journal report revealing the New York Fed is faulting the bank for “inaccurate and unreliable” financial reports. - The Affordable Care Act appears headed back to the U.S. Supreme Court after split federal court rulings on the law yesterday. - The wait for a new Apple thing is almost over. - Andrew Cuomo interfered with a state corruption commission’s investigations when they came too near people or groups with ties to him, the New York Times reports. - The SEC votes on rules for the riskiest money-market mutual funds at 10 a.m. in Washington. - The U.S. House Foreign Affairs Committee holds a hearing at 10 a.m. in Washington about the advance of Islamic extremists in Iraq and Syria. - Jesse Litvak, the Jefferies & Co. manager convicted of fraud, will be sentenced at 10 a.m. in New Haven, Connecticut. - Marek Belka, the Polish central bank governor, was scheduled to address lawmakers following recordings published in the local press that revealed him discussing “bypassing” the Monetary Policy Council. - So, are Lois Lerner’s e-mails lost or not? - South African sentenced to 77 years for poaching rhinos. - It’s National Hot Dog Day in the U.S. All exchanges will remain open. - The Commonwealth Games open in Glasgow, Scotland. - BOE’s Carney speaks at the Commonwealth Games Business Conference at 7:45 a.m. EDT. - Bloomberg TV has Rickie Fowler at 9:45 a.m. EDT and Drew Brees at 5 p.m., among other guests who probably actually have important things to say. - Denver Broncos owner Pat Bowlen has Alzheimer’s disease and is relinquishing control of the team. - George Harrison Memorial Tree killed by beetles.
In the fifth day since Malaysia Airlines Flight 17 was taken down, confusion.
It’s going to take some time before the bodies of the victims are returned to families, and how many of them have been recovered is uncertain. The train that supposedly had 282 bodies contained only 200 when it arrived in Kharkiv, Ukraine, the BBC reports. But at a press conference, the Dutch official leading a team handling the bodies said “there are probably more” on the train and probably still more in the wreckage, the New York Times reports.
As for more certainty about who did it, there was none. The U.S. has in fact found no direct link to Russia’s involvement in the crime so far, NBC News reports, citing three unidentified senior intelligence officials. The L.A. Times reports U.S. intelligence agencies believe Ukrainian separatists downed the jetliner accidentally after misinterpreting radar images on the sophisticated rocket launcher.
In Europe, foreign ministers didn’t exactly respond with the most robust punitive measures for Russia, not that anyone expected them to. They agreed on an expanded list of potential targets but forestalled any implementation pending further signs of how cooperative Russia’s going to be in the investigation.
Efforts to clip Russia’s access to arms markets were muddied also by a finding that an EU-wide ban on weapons sales could be circumvented in the U.K. by legal loopholes. Meanwhile, Hollande’s suggestion that France could still halt the sale of a second warship to Russia might be wrong because the contract has, in fact, been mostly paid for.
Couldn’t they just give them the money back?
While central banks have moved pretty much in concert for a while now, the gap is starting to show between the haves and have-nots and it’s setting up a period of divergence in monetary policy in the U.S. and U.K., where tightening is coming, and the EU and Japan, where it’s not.
It’s all about the jobs now, Sho Chandra and Simon Kennedy report.
Yellen and Carney need more jobs to soak up the slack in the labor market and hopefully give a boost to wage growth. In the rest of Europe, the labor force still isn’t expanding enough, with unemployment at 11.6 percent, almost double the U.S. and U.K. figures.
“What’s striking to us is that the market has increased differentiation in policy and done so fairly consistently with the labor markets and the labor markets alone,” Dominic Wilson, Goldman Sachs’s chief markets economist, told the reporters.
Increased productivity also is crucial to wage growth, and productivity gains are waning.
It’s difficult to see the point of discovering and making drugs that will cure people of Hepatitis C if it costs too much for insurance. It’s understood the amount of money pharmaceutical companies put into research and development (unless Valeant owns them).
Robert Langreth and Simeon Bennett report today on Gilead Sciences’ Sovaldi, the thousand-dollar pill, which adds up to $84,000 for a 12-week course of treatment that excludes the cost of a Johnson & Johnson drug often combined with it.
Right now there are about 130 million people worldwide infected by Hepatitis C, which kills more people than AIDS in the U.S. every year.
We’re not great at math, but...
Tony Dungy is expanding on comments he made recently regarding Michael Sam, the first openly gay NFL player drafted by a team.
Dungy as a coach and now network commentator has always been the opposite of the blood-and-guts, Mike Ditka-type. At Tampa Bay and Indianapolis and since he’s spoken eloquently. He’s compassionate. He helped get Michael Vick back right.
But he wouldn’t have drafted Sam, he told the Tampa Tribune.
“I wouldn’t have taken him. Not because I don’t believe Michael Sam should have a chance to play, but I wouldn’t want to deal with all of it. It’s not going to be totally smooth…things will happen.” The ellipsis is the newspaper’s.
One thing that already happened, as adroitly identified by Keith Olbermann and reported by the Washington Post, is that “"Tony Dungy just admitted that Tony Dungy wouldn’t be a skilled enough coach to deal with the distraction of doing the right thing.”
Sam, to his credit, responded only by saying he’s glad Dungy’s not coaching the St. Louis Rams.
Yesterday’s stage of the Tour de France was one of those days when even we have trouble figuring out just what went down.
With Italy’s Vincenzo Nibali from Astana holding a comfortable margin of 4 minutes, 37 seconds entering (and exiting) yesterday’s 16th stage, which was won by Michael Rogers, strategy among the teams turned to devising a way to secure a place for their rider to be on the podium in Paris with Nibali.
Well, one team anyway.
Movistar’s scheming in the Pyrenees managed to isolate the American Tejay van Garderen, the captain of the BMC Racing team, riding a pace Van Garderen couldn’t match and plunging him down the leaderboard while putting their captain, Spain’s Alejandro Valverde, more securely into second place. Van Garderen entered the stage in fifth place overall with a gap to Nibali of 5:49 and ended in sixth, but down 9:25.
Only three normal stages remain before stage 20’s time trial on Saturday and Sunday’s stage 21 being the final, ceremonial ride into Paris.
Today’s No. 17 is a run of 124.5 kilometers, or 77 miles, which is the shortest of the tour, coming off yesterday’s 237.5 kilometers, the longest. The race leaves Saint-Gaudens and ends in Saint-Lary-Soulan, and crosses four categorized climbs.
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