Herbalife (HLF) FTC News May Be Death Knell, Not Saving Grace - Blogger

Herbalife (NYSE: HLF) is modestly lower Monday (1.6%) as the FTC news, seen as positive last week, may be a death knell, according to a blogger that follows the stock closely.

Shares of HLF rallied with earnings on Friday as the company disclosed that talks with the FTC progressed to an advanced stage and the company may only be hit with a $200 million 'slap on the wrist'. However, blogger Quoth the Raven said the market is "100% completely wrong" on the FTC news.

The blogger is suggesting the new disclosures "foreshadow FTC alleging company is a pyramid scheme & crippling business changes."

The blogger said the market is incorrect in assuming a $200 million fine and its over. Instead, the disclosures states the fine would definitely come with "injunctive and other relief." And that's only if they settle. If they litigate, FTC will likely allege the company is operating an illegal pyramid scheme.

He also pointed investors to comments from the CFO on the call last week. During the call, when discussing the FTC disclosure, CFO DeSimone told an optimistic analyst to "read it carefully" and make sure she "understands it."

The full blog post can be read here.

You May Also Be Interested In

• Midday movers: Meta, IBM, Caterpillar fall; Chipotle rises
• IBM tumbles on soft Q1 revenue; announces HashiCorp $6.4bn acquisition
• AGBA Group Holding (AGBA) selling off into close, down over 17%