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Herbalife Ltd. Message Board

  • csco_brat csco_brat Dec 24, 2012 8:24 PM Flag

    N. America could be shut down and the stock still worth $40

    Most of the action is overseas and the growing daily consumption model. That is real consumpiton. Thats peoples lunches and dinners. In just 2012, revenues out the united states are going to be up about $600 million. That almost equals off of the N. American revenue. Something Ackman didn't discuss in his presentation.

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    • i exagerated, revenue in N. America will be 1.2 billion this year. The growth outside the U.S. would offset a 50% drop in N. America. There is very little operating leverage in the model. So if N. America was shut down assuming no operating leverage (not really true) that would be a 30% hit to the business. 30% off the high for the stock would be $49/share. I think you could make an arguement that the stock is already fully pricing in a complete shut down of N. American operations. At max i'm expecting $1 million fine from the FTC (that would be 10 times Amways fine) and a change in some rules and possible bad press that could knock sales 30-50%. But Herbalife would still be around. Ackman's Zero price target is a bit absurd. That would require every the governement of like 80 differnet countries taking action and giving the death penalty.

 
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37.96+0.06(+0.16%)Dec 19 4:00 PMEST

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