Herbalife Ltd. (NYSE:HLF), the nutritional supplement company which captured investors’ attention when Bill Ackman shorted it late last year, has created a new position. The company appointed Steven Dentali, Ph.D. as its new vice president of Botanical Sciences.
Herbalife’s New VP
A press release sent to several news outlets indicates that Dentali will focus on all of the company’s botanical activities. Herbalife Ltd. (NYSE:HLF) said he will identify, document and validate the proper botanical ingredients, formulations and processes, ensuring that they meet the standards for quality and safety.
Dentali is well-known in the herbal and nutritional supplement industry. His previous position was at the American Herbal Products Association, where he was the chief science officer. He has also worked in product development and quality assurance positions at a number of other companies.
Today after the announcement, shares of Herbalife Ltd. (NYSE:HLF) rose as much as 2 percent. The company’s recent results were heavily driven by sales in Asia, although it still remains a popular short position, thanks to Ackman. About 27 percent of the company’s outstanding shares are sold short.
Last week lobbying over Herbalife Ltd. (NYSE:HLF) increased dramatically as the company’s management and anti-industry lobbyists met with congressional leaders in Washington. Several politicians have asked regulators to resume their investigation into the company as a possible pyramid scheme, saying that they see evidence that their constituencies have been damaged as a result of the company.
The Federal Trade Commission is reportedly thinking about revisitng its 2004 opinion which explained how it analysts pyramid schemes, which Ackman has accused Herbalife of being. The agency may add some clarification about the differences between multi-level marketing companies and pyramid schemes, namely, that in a MLM, internal sales don’t count toward the company’s retail sales. These two numbers would then be used to distinguish MLMs from pyramid schemes, at least in theory.