QTR On HLF 3 8 17

Herbalife: A Devastatingly Perfect Storm that
Could Send Shares Under $30
Quoth the Raven Research continues to believe Herbalife is a strong sell with downside of more
than 46.3% before the end of 2017 and further downside in following quarters
The potential impact of a coming nation-wide documentary has been significantly underestimated
and may cause an unprecedented public relations nightmare for the company that it may
permanently have trouble recovering from
o For comparison, Blackfish, a similar style of critical documentary, drove SeaWorlds stock
price down 60% leading up to its release. A critical nationwide 60 Minutes expose on
Lumber Liquidators helped drive its stock price down more than 80% in the months
following the report
Carl Icahn has a history of selling his stake in companies into buybacks.
o In 2016 he sold $500m in shares into Nuances buyback. In 2012, he sold $1.17 billion in
stock back to Motorola Solutions. I believe Mr. Icahn may consider exiting his Herbalife
position before the documentarys March 17, 2017 release or before the FTCs sanctions
on Herbalifes business model take effect in May 2017
The companys largest growth market, China, appears to be stalling and a newly disclosed SEC
Foreign Corrupt Practices Act investigation and a new joint venture with a China-based company
raises questions about whether the company is still on solid footing in its largest market
I believe the companys true fundamentals continue to deteriorate much more than the companys
Non-GAAP numbers and accompanying constructed narrative lead on
I believe the only publicized sell side analyst for the company (who is also an Herbalife distributor)
continues to lead shareholders to the slaughter with an absurd $90 price target
Please carefully read the Disclaimer on the following page

Page |2
3/8/17 Herbalife: A Devastatingly Perfect Storm that Could Send Shares Under $30
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I am short Herbalife through owning put options.
I stand to make money if the price of Herbalife stock moves lower.
I am not a stockbroker or financial adviser. I hold no licenses and am not registered with FINRA or any other financial body. I
am a casual investor making casual observations for the purpose of discussion and open communication and analysis of
companies and stocks. Often, I am wrong. I have been wrong in the past and will be wrong in the future.
Again, all articles are my opinion only and are not suggestions to buy or sell any equity, bond, option or other financial
instrument. QTR may have long or short positions in any tickers mentioned at any time and reserves the right to open, close, or
modify positions at all time without notice. My conclusions are the result of my personal due diligence and have been wrong in
the past. Alright, now you kids go have fun out there.
www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com
Please make sure to read the accompanying disclaimer on the second page of this report.
QTR holds a short position in Herbalife (HLF) through options and stands to benefit if the price
of Herbalife stock moves lower.
Page |3
When I asked [outgoing Herbalife CEO Michael] Johnson how he

felt about all the people who had lost money trying to get rich
through Herbalife, he hesitated. Im sorry that it happened, he
said. Im sorry people lost money at a racetrack and at the lottery.
Todays Herbalife is about hard work and energy. I cant go and fix
anything in the past.
The New Yorker, 3/5/2017
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$30 Per Share and Under: To Me, Its Only a Question of When and Not If
In what will be my only report on Herbalife issued for the rest of this year, and possibly for good, I want
to give the public my firmly held belief on why the stock could easily be $30 or under by the end of 2017.
Obviously, this differs with the "analyst consensus" targeting $90 per share, but I believe my track record
of accuracy and attention to detail thus far with Herbalife should cause readers to carefully examine what
I am going to present in today's article.
I believe coming effects of the Betting on Zero documentary have been vastly understated and
underestimated by the market and I am in a unique position to comment on it, having been one of the few
who has had a chance to view the film prior to its release. I also believe that the company's latest
financing and corresponding buyback could possibly be used to take Carl Icahn out of his position in the
company. The new and growing debt burden that the company now has to deal with and service in an
environment where rates are going up could wind up being devastating, as I predict the core of the
business will continue to deteriorate, eventually giving way only to a balance sheet with a book value of
$2.11 per share.
Also to blame for what I believe will be Herbalife's continued deterioration this year is a reduction in
growth for the companys largest market, China. In a small informal blog post I put up a week ago, I
pointed out that I thought there was something weird about the companys new joint venture with China-
based company Tasly. While I believe that the deterioration of growth and this joint venture are likely tied
together one way or another, I have yet to fill in the missing link between the two. What is for certain is
that, across the board, the company's core business is deteriorating. Analyst estimates continue to come
down, the company's guidance continues to get lower, and the GAAP numbers tell a starkly different tale
than the companys adjusted Non-GAAP guidance. It is using these numbers that has helped me arrive
at the belief that Herbalife could very easily be worth a fraction of what it is worth today in just a few
short months.
We have already seen significant selling over the past few trading days, as the stock has moved from
around $60, where it was after earnings, to about $53, where it trades today. I believe this to be the
Page |5
beginning of a much larger downtrend that could once and for all wrap up the Herbalife story for the most
part.
Betting on Zero Could Be PR Armageddon
The first thing that needs to be addressed is what I believe to be a vast under-estimation and flippant
attitude towards a coming documentary that will be available nationally, as well as on subscription
services that have millions of international subscribers. Everyone knows that Betting on Zero is going to
be released on March 17 of this year. What everybody doesn't know is exactly how devastating the film
could be for the company.
It has been asserted over the last few years by me that much of Herbalifes organic internal growth comes
from the confidence of its distributors and the confidence that those distributors have in their ability to
earn from potential new recruits. This film will be the first effective instance of taking what is otherwise a
Wall Street story and boiling it down to a gut wrenching and stomach churning experience that any
average movie watcher can experience. It could wreck the confidence of millions of potential recruits, as
well as potential existing distributors.
I went into the world premiere of Betting on Zero at Tribeca having seen everything that has to do with
Herbalife. Because the company declined to participate in the documentary, much of the story was
produced using financial news clips and publicly available documentation on the company. These
interviews and details I have memorized and seen many times over. The story is nothing new to me, nor
are what I believe to be the harsh and negative effects of the company's business model on a good
majority of its participants.
However, even after my extensive background, I wound up leaving the film in tears because of the
portrayal of several personal accounts that director Ted Braun profiles in the film. The point is that if it is
enough to incite emotion from somebody that knows this situation cold, it is going to be more than
enough to incite real emotion from viewers who are only first familiarizing themselves with the Herbalife
saga. For those that want a little bit more of an in-depth look at the film itself, you can watch the trailer
and then read a review I wrote after the Tribeca Film Festival last year.
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The good news for critics and bad news for the company is that the film has since been amended to
include the results of the FTCs recent findings, content that will only serve to make the film that much
more devastating for the company.
Let's look at a couple of quick examples as to what mainstream media can do to the publics perception of
a company. First, there is the obvious comparison in Blackfish, the documentary that critically portrayed
SeaWorld for its business practices. It sent the companys stock down 60%:
In January 2013, the documentary Blackfish premiered at the Sundance Film Festival, telling the
story about Tilikum, a performing killer whale that killed several people while in captivity,
according to the official film synopsis. A little more than three years later - a period marked by
sustained activism, multi-platform distribution, and media coverage - SeaWorld officially
announced on March 17, 2016, that it will officially end its orca breeding program and end orca
shows at all of its theme parks.
The decision didnt happen overnight, and neither did the full extent of the films social impact.
The path to change was paved over three years of ongoing pressure sparked by an emotional story
told in an intimate, authentic way unique to documentary storytelling. And the signs appeared
quickly. In December 2014, about a year and a half after the films July 2013 theatrical premiere,
the stock price of SeaWorld had already declined by 60 percent.
SeaWorld stock has yet to recover from mid-2013, when the film first debuted:
Page |7
We also have the situation with Lumber Liquidators for comparison. Lumber Liquidators was featured
during one 15 or 20 minute critical segment on 60 Minutes and it subsequently resulted in an immediate
25% drop, followed by a catastrophic loss for shareholders when the stock moved down more than 80%
over the course of the year after the report:
Those that have not seen Betting on Zero or those who are writing it off as a nonevent do not understand
director Ted Braun's knack for grabbing the gut and the heart of the viewers who are watching. Braun
tries to take an objective look at both the company and the entire situation, but Herbalife comes out
looking horrible. I said in my review of the film in April of 2016:
While Betting on Zero is not a decidedly anti-Herbalife movie from the onset, its ability to profile
real victims, the Wall Street story and the simple truth about the company's business practices
could be absolutely devastating to Herbalife if the film is picked up and distributed on a national
scale.
And unlike anything that we have seen throughout the media coverage of the Wall Street story,
Betting on Zero tells us the story of 10 to 15 undocumented Latino immigrants who have lost
hundreds of thousands of dollars as Herbalife distributors. The film follows them in a quest for
justice and reparations, led by LULAC activist Julie Contreras. The film profiles Contreras just as
much as Ackman, explaining her ferocious activist nature as the product of proud Mexican
parents and a gunshot wound that almost left her dead in the early 2000's. A notable scene in the
film is Contreras' reaction to a cease and desist letter sent to her from Herbalife. Contreras, in
tears, swears to never apologize for sticking up for victims of Herbalife.
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The movie has some surprisingly touching and deeply emotional moments. I always knew that
what the company was doing to people who did not understand how the business plan worked
was disingenuous, but seeing on film a group of victims literally praying to God for justice after
many of them severed relationships and spent hundreds of thousands of dollars tugged at the
heartstrings of Ms. QTR and I, who both teared up.
Theres no real better way to sum it up than to say that if you hold shares heading into the national release
of this film, I believe you are playing Russian Roulette with your capital.
Could Carl Icahn Decide to Exit into the New Buyback at Any Time?
This brings us to one of the films antagonists, Carl Icahn. Without even bringing up the fact that Mr.
Icahn has petitioned publicly to buy up to 50% of the company and has yet to act on much more than half
of that - and without bringing up the fact that Mr. Icahn may have put out an inaccurate press release after
the FTC settlement announcement, let's talk some basic common sense about why Mr. Icahn could want
to exit his position in the company as soon as this month.
Think about this. You are Mr. Icahn. You hold a $1.3 billion position in Herbalife as of February of this
year and have seen the fundamentals of the business implode before your eyes. The CEO you originally
bet on is stepping down soon, after selling tens of millions of dollars in stock, some of which as recent as
just a couple of days ago. A documentary by an award-winning director is about to hit the national stage
that is going to make you look like a mix between Lex Luther and Gordon Gekko and, in the process,
will make Herbalife look like it is of extremely questionable moral and ethical standards.
Your good friend, Bill Stiritz, who you possibly got to buy into the stock, has just sold a significant
portion of his stake in the company after reassuring the media and the public just months prior that he had
full confidence you and the in the company. His stake in 2015 was 7.5 million shares, or about $350
million. His stake now is 4.8 million shares, which Matt Stewart writes may even be closer to 4 million
shares as many of his call options may expire worthless or out of the money.
If youre Carl, do you wait around to see what the results of this film ultimately are? If you do, what
about the FTC order that kicks into effect in May of this year? Do you wait for those sanctions to kick in?
Page |9
I sure wouldn't, but again, maybe the guy who has consistently displayed a lack of knowledge as to the
fundamentals of the business has some type of inside track lined up that I don't know about. It could
happen as my disclaimer says, Im often wrong.
After all, there has been all of this talk about Icahn wanting to make a bid for the company and take it
private. So far, he has done no such thing and we have already gotten one credible report that he was
looking to sell his shares in the company. I'm not the worlds greatest financial analyst, but that seems
like the complete opposite of taking a company private.
A case for a leveraged buyout gets significantly more difficult when you consider that the company just
completely obliterated its balance sheet with this last $1.45 billion credit facility it has taken on.
If he still wants to sell, isnt it more likely that Carl Icahn would sell into the companys newly authorized
buyback in order to take himself out of his position instead of trying to make a strategic move for the
company that is levered significantly more than it was just a quarter ago?
If you answered yes, we are on the same page. This option looks to be more and more of a reality as
investors look into Icahns track record of selling into buybacks. For instance, in 2016 he sold back $500
million in Nuance shares to the company.
And in 2012, he sold into Motorola Solutions buyback:
P a g e | 10
The filing speaks for itself, Stiritz said when reached by phone.
He declined to comment further.
Matt Townsend, Bloomberg, February 2017
P a g e | 11
The Companys Largest Growth Market is Stalling
In his first presentation on Herbalife back in 2012, one of the terms that Bill Ackman pointed out was the
"pop and drop" that occurs after Herbalife appears in certain geographic locations.
This phenomenon, as shown here, is a result of the company entering a geographic location with steam
and then eventually petering out as new recruits dry up and presumably the reality of the business starts to
set in for participants.
Over the past few years, China has been the growth engine for the company. After CFO John DeSimone
admitted a couple of quarters ago that comps were going to be difficult for China this year, it is now
looking like the rate of growth has turned negative in dramatic fashion in China. This past quarter, the
company experienced negative growth in volume points and net sales in China, indicating that the
company may very well be at the edge of the apex of saturation in China.
P a g e | 12
This market doesn't even have to drop further in order for the company to start to really fall apart - it
really only needs to stall or stagnate. As other geographic locations do the same, the size of Herbalifes
member base only churns in place or reduces slightly, indicating that it is potentially possible that the
company has reached worldwide saturation.
If you are a believer that the company is a pyramid scheme, this is extraordinarily bad news for the
companys future. For a company that the FTC seems to think survives primarily on recruitment, the lack
of participants to recruit would certainly seem to be a significant barrier to conducting business.
When you put the three of these things together the coming documentary, Chinas growth declines and
the coming FTC sanctions beginning in May - they create a perfect storm for a significant selloff in
Herbalife shares. Do you want to get caught long if Icahn sells prior to the documentary hitting the public,
or do you want to ride it out with little to no visibility as to where the company is heading?
Buyback Or War Chest?
(Charts and accounting in this section compiled with the help of Fear and Greed)
There is also a second, less possible, speculative argument to make that Herbalife may have simply been
raising the capital necessary to create a war chest for itself while it can with its recent $1.45 billion credit
facility. If the company doesnt buy Icahn out of his shares, this may be the case.
The structure with which the company has put together its buyback and the length of time that it intends
to use to buy back stock, three years, all suggest that the company could possibly be trying to just build a
war chest of cash for itself. Obviously, this would prompt several inquiries. The first of which would be
whether the company feels as though its free cash flow is going to be curtailed in a big way moving
forward. As you can see, the companys free cash flow continues to decline.
P a g e | 13
Another inquiry one may have in this hypothetical situation is whether the company has full and
unrestricted access to its cash that is domiciled overseas.
The Financials Are Just Plain Ugly
(Charts and accounting in this section compiled with the help of Fear and Greed)
I believe the financials are very clearly telling a story of a company that's core is in distress.
On top of the company seeing its fundamentals in stagnation or the beginning of real decline, there are
liabilities that aren't talked about in the mainstream and certainly haven't been covered by sell side
analysts that investors need to be aware of.
The Balance Sheet is Loaded with Sub-Par Assets
Investors in Herbalife should take a real close look at the assets that make up just about 1/3 of total assets.
For those unable to read a balance sheet, lets make the job a little easier:
P a g e | 14
Prepaid expenses are cash that has been paid out but not expensed in the income statement (yet). I
assume their value on liquidation to be $0.
Goodwill and intangibles are the same and have a $0 value at liquidation.
Deferred financing costs (same as prepaid expenses) also have a $0 value at liquidation.
When it comes to deferred tax assets - this one takes a little explanation. These are receivables that the
company expects will be collected from taxing authorities in the future. In reality, they may not really
be collected, but rather they will reduce future tax payments resulting from future generated taxable
income. This means that when the company loses money today (on an income tax basis), they will carry
those losses forward and offset future taxable income, generating a receivable today.
Think about that for a moment - Herbalife expects that it will collect these assets from various
governments in the future. Funny, as it doesnt seem that Herbalife has a good relationship with various
governments based on disclosed ongoing tax battles the company has been having with various
governments. For instance, the company has what appears to be over $150 million in outstanding tax
liabilities that it doesn't look like it is going to be able to avoid paying. I'm very simply basing this on the
fact that this language has been included in the companys filings for the last couple of years. Well
review more in a second. Back to these deferred tax assets.
The accounting standard for recording these receivables is more likely than not. In other words, it
could practically be a coin-toss on whether these assets will have any real value going forward, but we
can assume its at least a 51% yes/49% no situation.
This leaves us with other long term assets. This is $154 million - or just about 6% of total assets and
we know virtually nothing about whats in here, other than that they are long-term assets. In my book,
P a g e | 15
if you wont or cant tell investors what these assets represent they should be considered virtually
worthless.
Add this all up and youve got $871 million of questionable assets. What value should you ascribe to
these assets? This is up to you, but suddenly Im acquiring a thirst that only Coke Zero can quench.
The Company Could Have Over $200 Million in Tax Liabilities Outstanding
Lets dive into corporate tax liabilities a little further.
The blue bars above represent the future expected collections (more likely than not) to occur in the future.
The red bars represent amounts actually required to be paid in the short term. The net of these two
amounts represents the net income taxes receviable on the companys books.
Herbalife expects that it will actually collect more than it will pay in income taxes. Does that make
sense to you at all? If the future was reasonably assured and not just more likely than not, then maybe I
P a g e | 16
could accept that position. But this is Herbalife, and to me, the future production of taxable income is in
question.
All the while, known income tax exposures due to audits and other examinations by taxing authorities
have become massive.
Herbalife discloses the following tax-related exposures in its 2016 10-K, some of which are still being
contested or are in various stages of appeal:
Mexican Tax Administration Service - $56 million

o No known recorded liability
Mexican Tax Administration Service #2 - $14.2 million
Mexican Tax Administration Service #3 - $44.0 million
Mexican Tax Administration Service #4 2010, UNKNOWN AMOUNT
Federal Revenue office of Brazil - $7.6 million
Several Brazilian States - $49.4 million related to 2016 with the company believing it could
receive a similar assessment for 2014
Indian VAT authorities - $5.1 million
Korea Customs Service - $29.7 million (held in other assets on the balance sheet)
Greek Social Security Agency - $2.1 million
Add all of that up and you get a potential exposure of nearly $208 million, with $0 recorded as loss
allowances to cover these ongoing, active demands for payment from taxing authorities.
P a g e | 17
The company states that it does not believe a loss is probable on any of the $114 million in exposure
just from Mexico. Note the difference in accounting treatment between these liabilities (which are not
recognized unless they are probable) and recording the deferred income tax assets on the books only
when its more likely than not that they will be collected.
Does that make any sense considering the magnitude of these claims?
One must think that not only will these tax liabilities have an impact to the companys cash balance
eventually, but they are also probably not doing any favors in terms of the companys relationship with
each corresponding country. If you worked for the Brazilian government, for instance, and Herbalife
owed you lets say possibly $98.8 million (10-K, page 97) - that it had been trying to duck out of and
appeal, it obviously is reasonable to assume that Herbalife may not be a company that you give preference
to when it needs favors in the future.
Inventory is Building Up Will Write-downs Follow?
On-balance sheet inventory has exploded and now stands at 173 days sales. The explosion in inventory
stands in direct contrast to the deterioration in revenue production.
What kind of a company needs nearly half a year of inventory sitting on its books? Does Herbalife just do
a dismal job in managing inventory? Heres one possible reason: sales have dropped off so fast the
company cant put the brakes on production fast enough. Lets see what happens in following quarters
with potential write downs of inventory. I predict that well see some fairly significant write-downs in
coming quarters as the company may not be able to move this stagnating inventory.
The Debt Situation Has Gotten Significantly Worse
P a g e | 18
The current debt position is, for lack of a financial term, positively crappy. The additional net $890
million of debt issued in Q1 2017 (costing nearly 150% as much as the current outstanding balance)
makes things even uglier for the company.
(Blue = cash, Red = short and long term debt, Green = net debt)
Herbalife completed the issuance of $1.3 billion in term debt in Q1 2017, but what they didnt do a very
good job disclosing was the cost of that debt. With an interest rate floor of 0.75% + a margin of 5.50%,
cash interest cost will be at least 6.5% annually.
But thats only part of the cost. Add to the cash interest payments a 2% original issue discount, and
another 1.4% in issuance costs, and the effective interest rate floor on this $1.3 billion of debt will be
approximately 6.95%.
Cash interest payments on this debt will be about $81.3 million annually, with GAAP interest cost
reaching approximately $87.8 million annually.
P a g e | 19
Get to work analysts - add that interest cost into your models. Offsetting this additional expense will be
savings of interest on $410 million retired debt at an approximate rate of 4.29%, or $17.6 million. That
sounds like a great deal right? Replace debt at a nearly 162% higher cost?
Desperation is a stinky cologne
Spurbury Police Chief Grady
Cash Flow After Forex Has Collapsed
Lets go back to the companys cash flow, which I started to touch on earlier. Remember the good ole
days back in 2013 when the company was a cash flow gushing machine? $600 million in annual free
cash flow was the norm. Well, those days are long gone. Free cash flow after the impact of Forex now
stands at $200 million, or only about 1/3 of what is was only 3 years ago.
This is no longer a growth company. The mounting weight of investigations, sales declines, and a
general collapse in confidnce has wreaked havoc on the companys ability to produce cash from
operations. This could again be a reason why the 2017 increase in debt may not be used to repurchase
stock (as analysts have hoped) - but may instead be held by the company as a cushion to simply weather
the storm created by the collapse of the company.
Shipping and Handling Collapse Doesnt Match Revenue Collapse
It appears that shipping and handling revenues declined nearly 19.1% year-over-year, as compared to
reported sales revenue declines of 3.9%. This seems a little suspect.
P a g e | 20
Since the company began reporting shipping and handling revenues, they have steadily declined as a
percentage of sales. Why would shipping revenues drop off at a much faster rate than the revenues they
are probably helping to produce? Is it possible that shipping revenues are illustrating the true sales trends
within the company?
(Blue = sequential change in sales, Red = sequential change in S&H)
Net Income Adjusted or GAAP Is Getting Ugly
Because a majority of the companys net income comes from outside of the United States, 32% of
reported GAAP net income was lost due to currency translation adjustments in Q4 2016.
If you thought reported GAAP net income in Q4 2016 was bad enough, you should look at
comprehensive net income which is really ugly. Comprehensive net income shows the results of the
company after including the accretive or dilutive effects of Forex translation adjustments. Since
Herbalife is so heavily invested in non-USA entities, when the dollar strengthens, these investments lose
value at a very significant rate. In Q4 2016, 32% of reported GAAP net income was taken back by
Forex devaluation.
P a g e | 21
As President Trump would Tweet: Sad!
In the case of new estimates, we have a company whose net income estimates have declined
meaningfully, while EPS estimates push higher. Yet, we are supposed to believe that all is going to be OK
over the course of the long term.
P a g e | 22
If you believe the company is a pyramid scheme - or have even entertained the thought - you must have
also learned that at some point, pyramid schemes collapse. When they do, they tend to accelerate on the
way down. If this really is the final act for Herbalife coming up, time is going to be of the essence.
P a g e | 23
The file is closed with the SEC; Raising our PT to $90
Tim Ramey, June 25, 2015
There is an ongoing SEC investigation that we suspect resolves

with the closure of the FTC file.
Tim Ramey, July 2016
The U.S. Government is investigating dietary supplement maker

Herbalife over whether it violated foreign bribery laws while
conducting business in China
The company is cooperating with the SECs investigation and

cannot predict the scope, duration or outcome of the matter at this
time, Herbalife said.
Reuters, January 2017
P a g e | 24
Despite Everything, Herbalife Analysts Remain 100% Clueless
Despite all of this overwhelming analysis to the contrary, the one sell side analyst that gets the most
airtime on CNBC and with "serious investors" maintains his $90 price target on the company. It is an
unfathomable analytical method to seemingly continue to maintain a single price target for 6 months on a
company once it has lowered EPS estimates. Despite the fact that Mr. Tim Ramey has gotten numerous
extremely important things incorrect about the company, namely suggesting on national television that
injunctive relief was off the table and in a research note that the SEC had closed the file on the
company, he remains the only analyst that the mainstream media will amplify to the masses.
It is rare that a public counterpoint to his analysis, except for Bill Ackman, is made available. This despite
what I believe to be many misleading statements Ramey has made in the past and the above analysis of
raw data telling a very different story than the one the company and Mr. Ramey would like you to
believe. When a sell side analyst is recommending the stock in says in his disclosure that he is actually an
Herbalife distributor as well, don't you think the media should have the responsibility of assigning a
counterpoint to his statements? How about at least putting this on the screen before Ramey speaks:
(source: Pivotal Research note on Herbalife from January 2017)
If given a platform, a counterpoint to Ramey may want to point out the extremely inconvenient following
facts to him:
The companys fundamentals are deteriorating
The SEC has now opened an investigation into the company for potential FCPA violations in its
biggest market, China
P a g e | 25
The company has now taken on more leverage, putting more weight on the performance of the
business as a necessity for continued growth and solvency
The FTC's sanctions kick into effect in just two months
Bill Stiritz has reduced his stake in the company
A worldwide global release of what I believe to be a devastating documentary is going to occur in

just two weeks
A bet on the company here is a bet that Carl Icahn and other large shareholders are going to sit around
and wait to see what will happen. Thats a bet that I believe long investors will lose.

QTR On HLF 3 8 17

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Herbalife: A Devastatingly Perfect Storm that

Could Send Shares Under $30

Please carefully read the Disclaimer on the following page

I am short Herbalife through owning put options.

I stand to make money if the price of Herbalife stock moves lower.

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

When I asked [outgoing Herbalife CEO Michael] Johnson how he

The New Yorker, 3/5/2017

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Betting on Zero Could Be PR Armageddon

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

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And in 2012, he sold into Motorola Solutions buyback:

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Matt Townsend, Bloomberg, February 2017

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The Companys Largest Growth Market is Stalling

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Buyback Or War Chest?

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

The Financials Are Just Plain Ugly

The Balance Sheet is Loaded with Sub-Par Assets

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Lets dive into corporate tax liabilities a little further.

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Mexican Tax Administration Service - $56 million

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Inventory is Building Up Will Write-downs Follow?

The Debt Situation Has Gotten Significantly Worse

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Desperation is a stinky cologne

Spurbury Police Chief Grady

Cash Flow After Forex Has Collapsed

Shipping and Handling Collapse Doesnt Match Revenue Collapse

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(Blue = sequential change in sales, Red = sequential change in S&H)

Net Income Adjusted or GAAP Is Getting Ugly

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As President Trump would Tweet: Sad!

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

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The file is closed with the SEC; Raising our PT to $90

Tim Ramey, June 25, 2015

There is an ongoing SEC investigation that we suspect resolves

Tim Ramey, July 2016

The U.S. Government is investigating dietary supplement maker

The company is cooperating with the SECs investigation and

Reuters, January 2017

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

Despite Everything, Herbalife Analysts Remain 100% Clueless

(source: Pivotal Research note on Herbalife from January 2017)

The companys fundamentals are deteriorating

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

The FTC's sanctions kick into effect in just two months

Bill Stiritz has reduced his stake in the company

A worldwide global release of what I believe to be a devastating documentary is going to occur in

www.quoththeravenresearch.com | Twitter: @QTRResearch | e-mail: quoththeravensa@gmail.com

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