Is Herbalife an $8 billion house of cards?

jonnythan

http://www.theverge.com/2013/3/7/4074808/juicing-the-pyramid-is-herbalife-an-8-billion-house-of-cards

"Bill Ackman bets the vitamin maker is about to collapse, but not everyone agrees"

"Herbalife has been banned as an illegal pyramid scheme in Belgium and the U.S. Securities and Exchange Commission has launched an investigation into Herbalife’s business practices. (The New York Post reported earlier this year that Herbalife was also the target of a pending FTC investigation, but that suggestion turned out to be premature.)

Whether the heat from Ackman and various governmental entities mean that Herbalife is doomed remains to be seen. Though its stock price dipped sharply in the wake of Ackman’s presentation, it has rebounded somewhat since then — and its price right now is heavily dependent on the back and forth war between Ackman and his enemies who are applying a short squeeze. Regardless, while the pressure on Herbalife (and other MLMs) has increased recently, Dr. Taylor — who’s been actively researching MLMs for two decades — has more moderate immediate goals about where things should go.

"Hopefully this will get people to think more critically about these businesses before they get involved," Dr. Taylor said. "Because, to me, they’re pyramid schemes, plain and simple. I hope people understand that."

imtrinat

Their business model sucks but the products are actually really good. Greedy distributors try to push their pills, aloes, teas, and extra protein, but it's the fault of the consumer for not being educated if they fork over hundreds of dollars on something they can achieve on their own. I found that pretty much the only way I can stomach breakfast is in the form of a shake and Herbalife is one of the gentler ones. They have their uses. People just need to quit signing over their bank accounts in hopes of finding the magic skinny solution. Edit to note that someone tried to get me to buy in to one of the coaching packages. No thanks. They deserve every penny they lose for trying to get rich off their friends and family.

CorvusCorax77

my official opinion is, in a nutshell, *kitten* herbalife.

Admiral_Derp

The main problem with any product pushed in a pyramid scheme is that the company is typically so focused on generating income as fast as possible that little to no attention is placed on the quality of the product. Granted, I've got no objective proof, but in the one I was a part of a long time ago (a long distance company), and in the ones people have tried to get me involved with (mostly "health" supplements), I haven't been able to find any reliable data to support their claims. That's why most of the recruitment is focused on how much money you can make selling the product rather than on inspiring any real product loyalty.