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Bear Case Scenario Herbalife $HLF, $PG, $UL

Herbalife (NYSE:HLF) is about to reveal earnings results. Ponder this Bear Case Scenario

Management has been unable to lay to rest assertions that it is running a pyramid scheme.

Herbalife is loading up with over a billion dollars of debt mainly for financial engineering reasons. The covenant’s anticipate stratospheric debt to equity ratios. Not the way to create shareholder value.

Herbalife has been around for a long time. Why haven’t they attracted a red-hot take-over offer from someone who understands their markets.

China which looks like a huge market may turn out to be a major problem. All that glitters is not gold.

George Gutowski writes from a caveat emptor perspective.