Herbalife continues to be a battleground stock as Bill Ackman’s Pershing Square Capital Management fired its latest shot. Tim Ramey of Pivotal Research Group responded in a note titled “An Excellent Investment of 175 Minutes” after watching the firm’s slide deck and the nearly 3-hour video referenced in it. Unsurprisingly, he has a completely different interpretation of the video, which shows a 2005 meeting of Herbalife executives and top distributors.

Pershing Square still losing on Herbalife

At the firm’s European investor meeting, management said the firm lost 1.4% on its Herbalife short during the first quarter. Pershing then pointed to an Herbalife video in which Stephen Gratziani, a member of Herbalife’s Chairman’s Club, said: “Who wants to bring their family into a struggle to make it? Who wants to bring their family into an eventual deception?”

He also said in the video, “[S]ucessful people in retailing in our business, it’s a very small percentage… the majority of our people have a difficulty in selling products, in general.”

The firm noted that four of Herbalife’s independent directors have resigned in the last ten months. Also Pedro Cardoso, a director and member of the Chairman’s Club, has been indicted for financial crimes in Brazil. Herbalife has said it wasn’t aware of those charges and hasn’t disclosed the case in its filings with the Securities and Exchange Commission.

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Ramey defends Herbalife

One of the problems Herbalife has been dealing with for some time is the Federal Trade Commission’s investigation. Ramey said in his report this week that he thinks the FTC will watch the entire video referenced by Ackman’s firm, which is nearly 3 hours long. He seems to think Pershing is bluffing when it talks about Herbalife. Further, he said Pershing “mischaracterize a video” and that its investors may be fooled but that he doesn’t think the FTC will come to the same conclusion as the firm.

Ramey states that the video in question is a training meeting for key Herbalife distributors rather than a recruiting meeting. He said the multi-level marketing company’s top distributors are talking about the hard work it takes to build an Herbalife business.

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An uplifting message

The Pivotal analyst calls Gratziani’s message “quite refreshing, even uplifting.” He also said he doesn’t think Herbalife has anything to fear from the video if the FTC looks at it in its entirety. He added that the video simply explains how difficult it is to build a business and notes that the video is from 2005, before the introduction of the Nutrition Clubs and the daily consumption model.

He didn’t see anything in the video that was meant to mislead customers and denounced Pershing’s latest find as “not a smoking gun,” a phrase he has used in the past with some of Pershing’s other presentations.

A poker game between Herbalife, Pershing

Ramey sees the situation involving Herbalife and Pershing Square as a poker game (although it seems more like a game of chess in many respects). He notes that bluffing in poker is meaningless but that in this case, it is “more evidence of the shallow basis of the short thesis.” He’s basically calling what he sees as a bluff from Pershing Square, adding, “If your poker playing buddies known you’re prone to bluff, they will call your bluff more often. Good poker players know to use the bluff sparingly, and never when your opponent is already ‘all-in.'”

The analyst continues to rate Herbalife as a Buy with a $75 per share price target. As of this writing, shares of Herbalife were down 0.22% to $41.43 per share.