Bill Ackman’s comments against Herbalife Ltd. (NYSE:HLF) are affecting the company’s stock, Jim Cramer said in a Mad Dash segment on CNBC.
“Alright, Bill Ackman, I’ve been saying, ‘If you want to destroy a company, you know what, companies are fragile. They can be destroyed.’ […] I think we have to acknowledge the fact of the non-stop 24-hour Herbalife-is-a-scam Ackman call is having an impact,” Cramer said.
According to Cramer, the numbers today for Herbalife Ltd. (NYSE:HLF) includes a 4% decline in U.S. business and a 17% decline in new members. Cramer added that in the last five consecutive quarters, two quarters offered “huge misses”. Cramer said that the figures coming out of the Venezuelan operation of the company added to the troubles.
Furthermore, Cramer noted that the performance for the just-ended quarter is bad for the company because it has a lot of leverage.
Herbalife Ltd. (NYSE:HLF) reported a net income of $11.2 million, or 13 cents a share, a drop of 92% on revenue of $1.26 billion which rose 3.5%. According to the firm, adjusted profit per share for 2014 is expected to be in the range of $5.80 to $5.90, a slide from the previous guidance of $6.17 to $6.32.
Nonetheless, Bill Ackman is not the sole reason why Herbalife is down, Cramer and his partner said. They noted that Ackman has been criticizing the company since 2012 but the recent decline of the company’s stock price is because of “good reasons”.
Bill Ackman’s Pershing Square fund reported a portfolio value of about $12.6 billion by June 30. Also by the end of the second quarter, Carl Icahn’s Icahn Capital Lp reported owning 17 million Herbalife Ltd. (NYSE:HLF) shares.