$1B bet AGANST a pryamid scheme (HerbaLife)

[Jimzz]

There's a local health food spot that serves Herbal Life shakes, MLM or not the store does a crazy amount of business. People are all over their shakes so there is some legitimacy to the company. When I think pyramid scheme, I think schemes. Don't really see the scheme here. Yeah there are a lot of people who get caught up trying to get rich on the recruiting side and lose their ass. But the company sells a real product and it's one that many people actually buy. Avoid the marketing BS and they do make a fairly decent MRP shake, and it's not even really that expensive compared to the other options out there.

Hahaha so you sell it or someone you know.

Oh and just because you sell a lot of something does not make it legitimate. Slick50 sold millions of its oil treatments, still does not make it anything more than snake oil.

HerbaLife is just another scam that idiots buy into.

 

[AViking]

I don't understand why people are investing in Herbalife. What part of the financials, let alone the business model, support investing in their stock?

 

[Jimzz]

I don't understand why people are investing in Herbalife. What part of the financials, let alone the business model, support investing in their stock?

Seems like its more a pissing match now between those calling it out for being a pyramid scheme and those in the company and friends that want to "prove" its a "legitimate" business/product.

 

[rh71]

I have a friend who lost a lot of weight because of Herbalife - it was a pretty dramatic difference - and then she went and worked for them.

 

[slag]

Borrow 100 shares of stock that is worth $100/share today and sell for $100/share = $10000 for you. Over next month the stock drops to $50/share. You still owe someone 100 shares so you buy them back @ $50 each and return them to whoever you borrowed them from. You just made $5000.

How do you "borrow" stock?

 

[alien42]

How do you "borrow" stock?

it's called shorting and depending on your brokerage and the exchange a stock is on will determine your ability to do so.

 

[mkrohn]

I have a friend who lost a lot of weight because of Herbalife - it was a pretty dramatic difference - and then she went and worked for them.

The funny thing is though you have to quit snacking and start eating healthier which by itself would make you lose weight. What you are really buying is magic beans and a community of people to be a support network if that area is setup properly. Many of them have at least weekly meetings sorta like AA only for magic beans. Church tends to tie in somewhere as well but yeah its a scam that works for many people IF they drink the koolaid and change their life. It's a massive for profit cult but hey not being fat anymore helps them overall so meh

 

[Scarpozzi]

The way he's investing, I wonder if he just talked to Lester.

 

[QueBert]

Hahaha so you sell it or someone you know.

Oh and just because you sell a lot of something does not make it legitimate. Slick50 sold millions of its oil treatments, still does not make it anything more than snake oil.

HerbaLife is just another scam that idiots buy into.

HL is a MRP drink, the ingredients are clearly printed on the label. The product actually delivers on what the label claims. The marketing side of HL is crap, but the product does serve a purpose and does have benefits. I don't sell it, and I don't directly know anyone who sells it. But I know that as far as the type of shake it is goes, it's not all that bad of an option. And the shakes are cheaper than going to a Jamba Juice or Juice It Up and getting a vastly inferior sugar filled drink that's pushed as being good for you.

Would I ever sell it or get involved in the recruiting? Absolutely not, but if I'm out and about and want something quick that's not greasy fast food HL would be the 1st thing I'd go for. I make my own MRP shakes at home, but if I was lazy I'd probably buy a tub of HL.

 

[Jimzz]

FTC Investigating Herbalife
http://consumerist.com/2014/03/12/ftc-investigating-herbalife/

 

[Vdubchaos]

It's not the company, it's the stupid people that choose to work for such shitty company/enable them.

I blame people first.

 

[Jimzz]

Now the media is doing undercover look at herbalife.

Herbalife To Re-Train Distributors Not To Say Products Cure Brain Tumors
http://consumerist.com/2014/05/06/h...butors-not-to-say-products-cure-brain-tumors/

 

[Mark R]

Your quote above caught my eye because all along as I read I was thinking: what's in it for the lender? Someone mentioned the lender getting a $5 fee, but if lending those shares for $5 causes the lender to miss an opportunity to sell before suffering a $40/share loss it wasn't much of a deal.

The lender of the stock retains the right to "recall" the lent stock at any time, in the event that they wish to sell.

This is one of the many risks inherent in short selling. If you have shorted some stock, you carry the small risk that your lender might require their stock back. If your lender does demand their stock back, you have no choice other than to buy back at the current price.

A similar risk is called "settlement" risk. Because stock legally changes hands 3 working days after a trade is agreed, there is a risk your lender may change in the time between you agree the sale of the shares, and the time at which you have to hand over the certificates.

 

[JM Aggie08]

There was a HerbaLife regional convention at the hotel I was staying at while working in Dallas over the last couple of weeks. That shit is comical.

18-25 year olds, middle-aged burnouts. They know their target audience, and how to lure them in. One of the big-wigs rolled up in a Bentley plastered with HerbaLife logos.

The part that pissed me off the most was how excited they all were. Morons, all of them, walking around with their drink shakers and supplement powder, thinking they'll be the next one to make it big.

 

[alkemyst]

Amway is to big, plus they throw religion in there.

 

[destrekor]

HL is a MRP drink, the ingredients are clearly printed on the label. The product actually delivers on what the label claims. The marketing side of HL is crap, but the product does serve a purpose and does have benefits. I don't sell it, and I don't directly know anyone who sells it. But I know that as far as the type of shake it is goes, it's not all that bad of an option. And the shakes are cheaper than going to a Jamba Juice or Juice It Up and getting a vastly inferior sugar filled drink that's pushed as being good for you.

Would I ever sell it or get involved in the recruiting? Absolutely not, but if I'm out and about and want something quick that's not greasy fast food HL would be the 1st thing I'd go for. I make my own MRP shakes at home, but if I was lazy I'd probably buy a tub of HL.

First, HerbaLife is FAR, FAR more than "an MRP drink" - they have a ton of products.

Second, all of their products are either partly junk or ridiculously overpriced for what they offer.

You can treat yourself well, and get yourself into great health, on HL products. I'd never argue otherwise.
You'd be a fool to do so with the plethora of options out there.

There is no miracle story like "I lost ALL THIS weight, and improved my health THIS MUCH!" produced by HL products that cannot be produced by essentially the exact same routine using other products... oh, and saving money in the end.

HL is basically the MLM version of GNC. GNC and HL are, I'd say, on parity level with each other when it gets down to nutritional and product quality.

That's not exactly a ringing endorsement. You can get better, for less.
But it's not as easy, and not all sold in one spot, and not sold with massive marketing. That's why the smarter way doesn't get the spotlight.

 

[JEDI]

update:
http://wallstcheatsheet.com/busines...collapse-shares-plunge.html/?a=viewall&ref=OB

He recently released a documentary in which the so-called “entrepreneurs” tell us that there was almost no emphasis on selling the company’s products. Rather, new recruits were encouraged to sign more people up. They had to pay a lot of money in order to position themselves to do this, and they were promised that if they made these payments and worked hard at signing up new members that they would make a lot of money.

Herbalife has fought back by demonizing Ackman. It also suspended its dividend and assumed a lot of debt in order to aggressively repurchase shares, although as Ackman correctly points out, this effort was made near the top of the market, which suggests that the intent was to prop up the share price and to perhaps force a short squeeze.

This seems to validate Ackman, given that management appears to be more concerned about maintaining an image than generating long-term shareholder value.

 

[Eug]

I believe Herbalife was shorted by Ackman at around $45-50.

It's currently around $66. In fact, it was lower, but after Ackman made a speech about it last week, it rose 25%.

http://business.financialpost.com/2...se-incredible-fraud-on-tuesday/?__federated=1

And no, I have no shares in HerbaLife.

 

[Kaido]

There was a HerbaLife regional convention at the hotel I was staying at while working in Dallas over the last couple of weeks. That stuff is comical.

18-25 year olds, middle-aged burnouts. They know their target audience, and how to lure them in. One of the big-wigs rolled up in a Bentley plastered with HerbaLife logos.

The part that pissed me off the most was how excited they all were. Morons, all of them, walking around with their drink shakers and supplement powder, thinking they'll be the next one to make it big.

I have a friend who constantly gets sucked into this stuff. Reasonably intelligent, but just keeps falling for it over & over again. It's cringeworthy

 

[Hacp]

I believe Herbalife was shorted by Ackman at around $45-50.

It's currently around $66. In fact, it was lower, but after Ackman made a speech about it last week, it rose 25%.

http://business.financialpost.com/2...se-incredible-fraud-on-tuesday/?__federated=1

And no, I have no shares in HerbaLife.

I think it is common knowledge that Ackman has 1 billion in puts at around 50 dollar strike price until January 2015.

 

[JEDI]

I think it is common knowledge that Ackman has 1 billion in puts at around 50 dollar strike price until January 2015.

wonder why he didn't sell when the stock hit $20? (almost immediately after he announced he shorted herblife)

 

[OverVolt]

Ultimately It'll crash. Its like Avon or Scamway in the 90's.

 

[phucheneh]

Ultimately It'll crash. Its like Avon or Scamway in the 90's.

I don't think Avon (or Mary Kay) are quite the same. They're more like being a small-time pot dealer: start selling so you can smoke for free.

In those cases, people very much want the products.

 

[Blackjack200]

wonder why he didn't sell when the stock hit $20? (almost immediately after he announced he shorted herblife)

He didn't have anything to sell? He shorted the stock, which means he borrowed the shares from brokerage houses and sold them. That's what drove the price down to $20. The simple act of buying the shares back to return them to the lenders would have driven the price right back up.

 

[Sureshot324]

I don't understand why people are investing in Herbalife. What part of the financials, let alone the business model, support investing in their stock?

The business model is proven. Cutco knives have been around for decades. Every year a new generation of suckers comes of age so they will never run out of people to fall for the scam. Just because it's a pyramid scheme doesn't mean it ever has to collapse.