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As Herbalife Execs Seem to Disappear, Betting on Zero Goes Viral

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By Quoth Thy Raven Research, QTR

To open and “set the mood”, read this excerpt from Herbalife’s most recent 10-K filing.

“The loss or departure of any member of our senior management team could adversely impact our Member relations and operating results. If any of these executives do not remain with us, our business could suffer. Also, the loss of key personnel, including our regional and country managers, could negatively impact our ability to implement our business strategy, and our continued success will also be dependent on our ability to retain existing, and attract additional, qualified personnel to meet our needs.”

Now, let’s address what appears to be four Senior Management executives possibly leaving the company since this 10-K was filed just months ago.

Mystery Executive #1

If you follow me on Twitter or have been following the Herbalife story for the past week, you know that I have been raising a lot of questions about Herbalife executives seemingly disappearing from the company without apparent rhyme or reason.

Last week, I raised the question of why the company’s VP of China, a market that is responsible for about 20% of total revenue, was reported to have “suddenly left” by the Chinese media. I wrote an article documenting that story.

Mystery Executive #2

In the following days, it was reported by various sources on Twitter that the company’s general counsel had also left the company.


Certainly, the General Counsel leaving the company for any reason may be material seeing as how the company is still battling various regulatory issues across the board, including a previously disclosed FCPA investigation in China and a potential ongoing SEC inquiry.

I phoned the company last week to confirm Mr. Friedman had in fact left and was told by Investor Relations, when asked about Friedman, that I needed to talk to the media department. They transferred me to media and I went to a voicemail. When I called back a second time, the Investor Relations line went directly to voicemail. On a third call back, I was again given the voicemail at Investor Relations. On a fourth call back, I simply asked the operator to transfer me to Mark Friedman, the company’s General Counsel. The operator told me “he is no longer with the company”. That falls in line with what has been reported on Bloomberg.


The screenshot above shows Bloomberg stating that he may have left the company in mid May. If all of this is true, it leaves one to ask why the company would not disclose that its EVP, Secretary and General Counsel had left.

Mystery Executive #3

To make things even weirder, additional people have disappeared off of Herbalife’s website over the last few months, including Frank Lamberti, former Senior VP and Managing Director of North Asia.

north asia

As of 6/3/2017, Mr. Lamberti is no longer listed on Herbalife’s executive list on its website.

Mystery Executive #4

The company’s VP and Managing Director of Brazil (where they have a sizable potential tax liability also outstanding) also seems to have disappeared from the company’s website. This shot was from March of 2017:


Subsequent to that in April, Mr. Okuhara does not appear on the website.

goji 2

Why is this Important?

This is worth noting for a couple of reasons. The first is a relatively obvious concern. If these four people have in fact left the company, that represents about 20% of all listed managers on the company’s website (there’s about 20 total at any given point). Why has the company not talked about any of these managers if they have, in fact, left? Is there a reasonable explanation?

There were rumors last week that the company had addressed it’s VP of China leaving on a conference call, but this was obviously not a call that everybody was privy to if it took place. Couldn’t this be a violation of Reg FD, if true?

We know that senior management turnover is a real risk for the company because it says so in the company’s 10-K. The company states very clearly in its 10-K that the loss of senior management could have a negative affect on the business:

hlf risk factor

Based on that, if the above is all true, why would investors not be given an explanation or transparency on what has or has not transpired here, especially while the stock has risen about 6% over the last couple of weeks?

The company took the time to issue a nice press release last week talking about the CEO transition, but did not comment about any of these other management changes.
Perhaps there is a reasonable explanation having to do with the new CEO, but I’d like to hear more from the company. It seems like management turnover would be the last thing the company wants at this stage in the game and the company’s new CEO, Rich Goudis, was previously President of the company. One could assume if he wanted these people out a while back, it would have already happened.


At the same time, while the stock rips toward new 52-week highs, Betting on Zero, a critical documentary (now available on Netflix) that portrays the company as a pyramid scheme, has gone viral on Reddit. Over the last 24 hour period, the documentary has received nearly 6800 upvotes and has garnered a conversation of over 800 comments.

It’s currently the #4 ranked post on Reddit’s r/documentaries page.


I have no choice to believe that the documentary’s first couple days on Netflix have been a success. For reminder of the negative affect I feel the documentary is going to have on the company, you can click through and read this Yahoo Finance article here or my most recent 28 page analysis on why I believe Herbalife’s stock will still eventually crater.

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