Ackman Caused Complete Vetting of Herbalife: Ramey

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Dec. 17 (Bloomberg) -- Tim Ramey, analyst at DA Davidson, reviews the re-audit of Herbalife for fiscal 2010-2012 on Bloomberg Television’s “Market Makers.” Rainey, his firm, and family do not own shares in Herbalife.

Price target to 119 million dollars after the news.

First of all, christmas came early, you were right, i was a skeptic.

Clearly, i was wrong.

What does this audit tell us?

A great deal, first of all.

The stakes were elevated so high by mr.

Ackman, in a great way we owe a huge debt of gratitude to him.

The vetting of this company has been incredibly complete.

Yesterday he said it was not the purview of an audit firm to investigate pyramid schemes, but he knows that nothing could be further from the truth.

Hold on, hold on, i am giving you full credit, it is great, but clearly you do not really appreciate till ackman, saying that you owe him a huge bed of gratitude -- a huge debt of gratitude.

I do.

The stock is up 130% and we appreciate it.

What he has done is cause the complete vetting of this company that will allow this company to go to we think 25, 30, maybe 35 in multiple, where it should be.

It should be priced with growth stocks.

In a perverse way, yes, we owe him a huge debt of gratitude.

His claim yesterday, which was absurd, it is an auditors purview -- i am actually going to give you the quote here.

"it is not the role of herbalife's auditor to determine if the company is a pyramid scheme.

The few that make money earn the vast majority of their profits from recruiting.

Herbalife is a pyramid scheme that will be shut down by regulators." i know you want to comment on that.


Both the audit committee and auditor are to investigate allegations of illegal activity and you can bet that this investigation has been thorough, complete, and is over.

Are we going to see an lbo?

I am not sure about that.

It is possible.

But i think that it is quite likely we will see a significant share repurchase.

But lbo is hard to analyze.

That is a binary event.

For you if there is an investor call tomorrow, what do you want to know?

I am primarily focused on growth.

The story is to get people back focused on growth.

We saw them quadruple sales in china over three years, it was just stunning.

300 and $50 million to $1 billion in sales.

We think that herbalife is on the same path.

It showed a 77% sales increase in the third quarter.

My job, right now, is to get back to business and focus on the growth of this company and get growth stock investors to look at the opportunity.

Long on stocks, they had a few things to say about where they thought the company could go on a growth perspective.

Take a listen.

You have this large cohort of the unemployed that might be unemployed forever.

This kind of new normal of the natural unemployment rate in the world, you look at these countries with 50%, 60% youth unemployment, from a timing perspective this all played into something that fits into a macro ideology.

Do you think that youth unemployment has connectivity to herbalife?

I am not sure if it is used, but it is certainly the search for an opportunity.

Boy, when i go to these huge extravaganzas, i go to about one per year, i cannot stand to many of them, but these people are so energized and excited about the role that they play as entrepreneurs and in control of their own destiny.

They might only be making $50,000 per year, $30,000 per year, but they could not be more proud of what they accomplished.

That is the role that i see mlm's playing.

That is where i become a skeptic.

You only go to one or two of these per year?


For me it feels like a bizarro scam.

When you are there do you not like it because it just is cheerleading?

It is absolutely cheerleading.

It is almost a religious experience.

These people are the faithful, for sure.

I do not need a lot of that to get up to speed.

But about once per year, i go.

This text has been automatically generated. It may not be 100% accurate.


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