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Gasparino on What To Watch for With Herbalife

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  • Description

    FBN's Charlie Gasparino breaks down the latest on Herbalife battle.

  • Duration 3:54
  • Date

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Herbalife holding a conference call as we speak -- we've been flashing some headlines throughout the hour off from that call and -- gets rid of it all over the -- story first report on the decision to start a stock buyback program which they talked about here today.

And Charlie joins us now we.

Uninteresting its stock buyback is faster because when we've report that they were reported that they are actually doing it.

There -- -- reports in the Wall Street Journal and elsewhere that they were not doing it they actually cited that the Fox Business Network in that reporting that they were not doing it we should point out the Wall Street Journal was wrong on this.

They are doing -- are reporting was right.

And -- laid out some of the specifics on how they did this -- -- -- -- point out the just in case you're -- to Herbalife which if you policy and not but just in case is your first time watching.

This is a battle going on between short -- -- bill act when this is essentially a scam pyramid scheme.

And the company's says it's not.

-- people on both sides Carl Icahn took a big stake in her Herbalife -- has taken -- stake they say it's a great company bill -- out this and it's not still.

Cut somebody interest in parts of these headlines I'll come back to it.

Herbalife said its repurchase around 52028.

Million dollars in stock this year.

It's part of the buyback program that's good short term for investors.

Herbalife will say it will more clearly delineate between customers and distributors of impact than a minute that is pretty key.

Herbalife the president as -- city of approximately 4500 nutrition clubs and in the North American a lot of that's a lot of clubs right.

They have a retention rate mean they keep they keep selling over 51%.

They talk about -- sales we place these headlines here -- the two things you shall look at look at the repurchase program.

Should be still web based -- a lot of I think I think they have a billion dollars.

222 were -- so they're right there do what they have through -- they got some more to go OK so that's good short term for stock.

Long term.

This is interest in Herbalife -- more clearly delineate between customers and distributors.

We we should point out Herbalife is an investigation by the Securities and Exchange Commission part of act -- Accusation is that Jeff customers and distributed by the way we got into this would -- -- Walsh the president on you know at Fox Business.

If your customers are your distributors.

You know at some point you know is that it is out of business model that's sustainable because -- would -- -- scheme is just keep getting distributors to pay a -- And maybe they don't -- That much right may be the fact is they can't sell that much and as a customer they can't buy that much.

And you're you're you're essentially you're revenues implode at some point right because you run out of it's it's not a product that selling very right.

They put they're they're gonna more clearly delineate my opinion is because you have an SEC investigation now here's the long term -- if you -- an investor.

Watch if the SEC -- them -- this is -- potential sanctioned by the SEC to try to do my views are trying to get ahead of it.

Long term for the stock that's probably not good so you have a short term good.

Right we have good earnings.

We have investors piling on our side and we also have a repurchase agreement that's that's halfway through long term.

This hope this thing about clearly do we need customers and distributors.

Why did they do that to -- my view is they're getting out ahead of an SEC enforcement action they're gonna beat it is a good chance that's and they will.

It's a good chance to going to be good thing -- we know.

That they're being investigated so that's what we are right now I think what we should.

Look at with the stocks -- do that it's been up the last couple days we have a stock chart that we should fairness.

Down a little bit I think you know its interest in the could be to some profit taking.

Also could be this whole thing with delineating between cousins distributors I -- that caught my -- immediately.

Because you have to ask members SEC goes after companies for disclosure.

When -- disclosing your customers and distributors right and that gets at the heart.

Of what -- Hussein customers can't be distributors at some point right that business model full story.

-- Charlie great stuff in the call I believe is still going on select keep on top of that thanks Charlie gets freed up.

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