Did Bill Ackman Find a Recruit for his Herbalife (HLF) Short Downstream? - InvestingChannel

Did Bill Ackman Find a Recruit for his Herbalife (HLF) Short Downstream?

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Bill Ackman may have found a much-needed friend for his Herbalife Ltd. (NYSE: HLF) short trade…

When asked about the Herbalife situation in a Reuters TV interview, noted short seller Jim Chanos said that while he has not commented publicly about Herbalife he has studied MLM companies closely in the past.

Chanos said at the end of the day, what really matters is how much of the product is sold through. In other words, are customers buying and using the product, or is it just backing up in distributors’ garages.

Ultimately the winner of the bull-bear debate will come down to if the business proposition is good or not.

Chanos took a shot at Herbalife, noting their are “so many competing venues for weight loss” like Weight Watchers and Jenny Craig that don’t have MLM aspect.

The interviewer ended the interview asking Chanos, “Will you be making a public comment on Herbalife?” He responded, “All I’m going to say is we’ve studied the industry very carefully… we’ll leave it at that.”

In addition to Herbalife, Chanos could be referring to other MLM companies like Nu Skin Enterprises Inc. (NYSE: NUS), USANA Health Sciences Inc. (MASDAQ: USNA), Avon Products Inc. (NYSE: AVP), Blyth, Inc. (NYSE: BTH), or Tupperware Brands (NYSE: TUP), among others.

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