Herbalife Ltd. (HLF) CEO on Bill Ackman: ‘We Want The SEC to Take Action’

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Here’s what he had to say (emphasis added):

“First of all guys, this isn’t about Herbalife’s business model, this is about Bill Ackman’s business model. This is wrong. This is totally wrong what’s taking place. Where’s the SEC protecting the individual shareholder right now? This is blatant market manipulation. This appears to be another attempt to illegally manipulate the market by a group of short sellers.

More specifically, Johnson discussed the peculiar short positions that he and his team were aware of, saying (emphasis added):

“Here’s what we know […] an extraordinary number of puts on our stock were due to expire this Friday. We previously learned this activity was pegged at some kind of “significant event.” Mr. Ackman suddenly announces he will make a presentation on Herbalife on Thursday, the day before the puts expire […] Now we know that this has been going on for – in the shadows as we say – for the last eight months”

Johnson adds that bears “need to come out and […] see our customers […] see the way that our business is put into the marketplace,” calling claims of a pyramid scheme “a ridiculous assertion,” adding that “90 percent” of revenues are derived from outside the company’s distribution system.

Finally, he mentioned that “we want the SEC to take action.”

You’ve seen both sides of the argument, and there’s not much more to report until Ackman’s presentation at the Sohn Conference Foundation tomorrow morning. It’s notable that according to the original CNBC article, Bill Ackman believes that Herbalife is “the most compelling short case for a stock he has “ever seen,”” so we’ll have to wait and see. In the meantime, check back at Insider Monkey for updates.

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