Herbalife Ltd. (HLF): Post CEO Bill Stiritz Ups His Stake Again

Herbalife Ltd. (NYSE:HLF) shares are in recovery mode today after Post Holdings, Inc (NYSE:POST) chairman and CEO Bill Stiritz disclosed in a filing that he had upped his stake in the company yet again. In the filing dated Wednesday, he disclosed a more than 7% stake in Herbalife and revealed that he plans to continue talking about strategic options with the company’s management.

Bill Stiritz moves in on Herbalife

Stiritz has been amassing his stake in Herbalife Ltd. (NYSE:HLF) for quite some time. In November, he had a 6.38% stake in the nutritional supplements company and disclosed in a filing then that he had suggestions for Herbalife. This week’s filing indicates a 7.39% stake in Herbalife.

Coho Capital 2Q20 Commentary: Podcasts, The New Talk Radio

Coho Capital LogoCoho Capital commentary for the second quarter ended June 30, 2020. Q2 2020 hedge fund letters, conferences and more Dear Partners, Coho Capital returned 46.6% during the first half of the year compared to a loss of 3.1% in the S&P 500. Many of our holdings, such as Netflix, Amazon, and Spotify, were perceived beneficiaries Read More

Also in November, it was reported that Stiritz was approaching investors with a proposal to take Herbalife Ltd. (NYSE:HLF) private. Interestingly enough, Stiritz hired notorious Herbalife bull Tim Ramey away from the investment firm he was working with and brought him on at Post Holdings, Inc (NYSE:POST) as director of strategic ventures.

Stiritz analyzes Herbalife’s business model

Herbalife Ltd. (NYSE:HLF) has been under fire for more than a year, facing allegations that it is a pyramid scheme. This week Canadian regulators opened an official investigation into the company to determine whether it is a pyramid scheme. That investigation came not long after a U.S. senator joined the call for a probe into the company.

Stiritz, however, isn’t convinced that Herbalife Ltd. (NYSE:HLF) is a pyramid scheme. In his filing, he said he analyzed Herbalife and “concluded that it has a sound business model, a strong distribution system and a positive outlook for long-term growth opportunities.” He also said he thinks Herbalife’s market capitalization is undervalued and that he plans to “interact with Company management,” offering advice and his views about how to further the interests of Herbalife shareholders.

He said his advice could “address a wide variety of matters,” including distribution possible strategies for financing or recapitalization, possible stock buyback programs, and “potential strategies for confronting the speculative short position that currently exists in the Company’s stock and its attendant negative publicity campaign.” The statement is rather similar to that in Stiritz’s November filing regarding Herbalife Ltd. (NYSE:HLF).