Some of you may have caught Herbalife CEO Michael Johnson’s interview with LA Magazine over the last couple days.
If you haven’t watched the full 19 minute interview, you can check it out here. It’s the first time Mr. Johnson has come out and really commented on the Ackman situation since I believe he was given a “STFU” order from his lawyers after flipping a shit and blowing the CNBC interview post Bill Ackman’s original presentation.
There’s some great quotes from Mr. Johnson in this interview.
First, the obligatory insult to bloggers. Bill Ackman called Matt Stewart a “genius” at his last presentation. Michael Johnson calls us “knuckleheads in bathrobes”. One of these two guys has got to be closer than the other, and for my own sake, I’m going to (surprise) side with Ackman. Here’s the quote:
“Stock price is emotionally affected right now, I mean you watch it one day to the next. Somebody says something, you know – what I call these knuckleheads in bathrobes that blog – they’re out writing something and our stock will move eight percent!”
You know us – typical knuckleheads – honors bachelor degrees, MBAs, graduate degrees and PhDs from places like MIT, Pepperdine and Cornell! What a bunch of uneducated hacks!
In Mr. Johnson’s defense, there’s no way I could bike 100 miles like he can. So, feel free to rub that in my face whenever you’d like.
Next, at around 6:45, Mr. Johnson unleashes this steaming turd whopper:
We are very very confident that as the FTC comes to their investigation finality – as they get all the facts on the table, they’re going to go “this is a pretty good company”.
A “pretty good company?” If the FTC comes out and says those words exactly, I’ll ship off to Iceland for the remainder of my life. What kind of a half assed answer to an honest question is this? Who does Mr. Johnson think he’s fooling? The whole answer sounded forced and made up. It reminded me of this.
At 7:20, Mr. Johnson really lays out the main course when after he’s asked about the investigation and corresponding stock price movement, he comments:
“We’re gonna be just fine, this company is going to be stronger and better than ever.”
I hate to burst Mr. Johnson’s bubble, but you can’t just come out and say that the company is going to be stronger and better than ever without knowing what how the FTC is going to rule. Otherwise, you’re just making shit up – and that’s a breach of your fiduciary and a false and misleading statement (A.K.A. fraud).
One of the two following things have to be true about that statement:
1) Mr. Johnson knows something the public doesn’t about the FTC investigation and is now obligated to 8-K his reasoning behind making that statement within 4 business days of him stating it to the public.
2) Mr. Johnson was once again “speaking off the cuff” and simply lied.
For the same reason John Tartol, who sits on the Board of Directors, can’t come out and tell people they’re going to make $100,000/month selling shake mix, Mr. Johnson can’t come out and say “we’re going to be fine”. He could say, “we BELIEVE we’re going to be fine”, but he can’t make finite statements like that and his lawyers likely told him that (or will be reminding him soon).
At 11:50, Mr. Johnson comes right out and admits there’s still people breaking the rules in Herbalife. He says it like he’s just flicking his earlobe, very nonchalantly, without any semblance of being the CEO of a company under a massive Federal investigation:
“There’s going to be somebody not following the rules. We’ve had people like that in our organization, we have some today!”
Ah! So matter of factly – “we have some today!” Isn’t that lovely? Rolls right off the tongue! We have some today! Say it with me!
Then there’s the topic of understanding retail sales in the company. If you notice, around the 13:35 mark, he states:
“We know all the numbers, we know who recruits people, we know who sells product to someone else.”
I find that to be a baffling statement. They know the numbers? This whole issue could have been put to rest 2 years ago by the company simply releasing their retail sales numbers. We heard then that those numbers “were not relevant and that the company didn’t track them.”
Now, all of a sudden, they know the numbers? I’m sure the FTC and SEC are interested in this admission by Mr. Johnson.
Here’s another interesting fact – the woman that does the interview, Giselle Fernandez, is a member of the “Friends of Herbalife.” See? This is her name at the bottom of a “Friends of Herbalife” letter:
Remember the ABC report with Mr. Bohorquez, when the bulls flipped out because Mr. Ackman protected a man’s livelihood from potentially being effected via loss of a job due to his being an Herbalife whistle blower?
Well, I have news for you, a lot of these “Friends of Herbalife” allegedly got money from the company as well.
I wonder if Ms. Fernandez did?
Hey, Mr. Johnson, you like bathrobes? Here’s a bathrobe for you. What do you think?