Jim Cramer's Best Blogs
NEW YORK ( TheStreet) -- Jim Cramer fills his blog on RealMoney every day with his up-to-the-minute reactions to what's happening in the market and his legendary ahead-of-the-crowd ideas. This week he blogged on:
- Herbalife's secret weapon;
- Bill Ackman's losing battle; and
- takeovers in the bank patch.
Click here for information on RealMoney, where you can see all the blogs, including Jim Cramer's -- and reader comments -- in real time.
Herbalife's Secret Weapon
Posted at 3:15 p.m. EDT on Friday, Feb. 15
Take Ackman out of the equation. Take Icahn out of the equation. Take Loeb out of the equation.
Where does that leave Herbalife (HLF) ?
How about as an international company that is doing well -- well enough that it could leave the 20% of its business that is in the U.S. and still do great.
Isn't that the ultimate weapon against the shorts?
Isn't that the ultimate unimpaired earning power of HLF?
When Bill Ackman says that HLF belongs at zero that means he thinks the U.S. regulators -- some regulators, we aren't sure -- are just going to shut it down. They will do that, he believes, because he is smarter than they are, wiser, and more caring than they are. They will do it, he believes, because he has done all of their work for them and they just have to issue the edict.
But how about HLF? Does it have to stand by the edict? What happens if it takes one of the least profitable of its businesses, the U.S, and simply walks away from it?
That's the ultimate challenge to Ackman. Herbalife is barely a U.S. company.
Now, I know that Carl Icahn and Dan Loeb like it, and I sure wish that they would say. "We have checked this company up and down with our lawyers, former Federal Trade Commission lawyers, and lawyers who worked with other direct sale schemes, and Michael Johnson and his team are pristine."
But I think the far more important concern is that the U.S. is not the engine here, so the U.S. cannot pull HLF down as much as Ackman needs a U.S. entity to try to do so. He can't buy one. He can't give enough money to senators and congressmen to shut it down. If he thought he could get a temporary restraining order against HLF, he would have tried already.
As always, I am not advocating that you buy this stock or sell it. Because the issue isn't HLF itself, it's the egos involved.
If, however, the issue ultimately becomes HLF, then the solution is an offshore one and I think it will work out just fine. Some earnings impairment from the U.S., and then off to the races to play again.