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Matt Stewart

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  • Ramey Rebuttal: Herbalife Is Going To $0 [View article]
    you're still missing the point...

    do participants focus their efforts on recruiting new participants to infinity or not?
    Oct 24 09:20 AM | 2 Likes Like |Link to Comment
  • Ramey Rebuttal: Herbalife Is Going To $0 [View article]

    The failure rates in Herbalife's distributor pool refute your irrefutable evidence that the saturation argument fails to hold water.

    When a marketing plan intentionally and deliberately pushes out the supply curve of salespeople ad infinitum inevitable harm materializes.

    1) Aggressive discounting takes place as participants battle for market share
    2) Profit margins collapse accordingly
    3) Books of business become limited in volume of customers
    4) marginal entrants fail

    This is simple Economics 101.

    Herbalife's unique ability to replenish the pool of dying fish with newly hooked fish only makes this particular pyramid scheme more sinister and not less.

    I suppose an MLM could be legal if it didn't try to pay to infinity, recruit to infinity, nor intentionally overload a given geography or zip code with distributors.

    Unfortunately, Herbalife doesn't fit with this description. Participants focus their efforts and energy on recruiting all of the time.

    This is the very definition of a pyramid scheme that sells a mathematical fallacy that simply cannot come true.

    When you push the recruitment of an infinite salesforce to pursue a finite opportunity set you are marketing a scam.

    Herbalife is a scam.
    Oct 24 09:19 AM | 2 Likes Like |Link to Comment
  • Through Herbalife's Venezuela Looking Glass... And Back Again [View article]

    Great work! I enjoyed the read. I have the following observations.

    1) Human nature is such that if an arbitrage opportunity presents itself, it will be taken. This, of course, is the same kind of motivation/incentive that causes recruiters to perpetually lie about the probabilities of succeeding at the business opportunity.

    2) Your work is important because it puts the credibility of PWC into the spotlight. Can HLF's auditor endorse the nonsensical exchange rates in HLF's SEC filings any more?

    3) Management's credibility will be put to the test on November 3rd. If they print another miss the sell-side of the street will abandon them. This is a high stakes quarter. Two misses in a row will torpedo what little gravitas management still has.

    4) You reveal, yet again, just how shifty the people who work for this company are. Also, you reveal how much power the senior distributors have over the company's policy framework. Q. Does John Tartol or Edgar Balbas work for Michael Johnosn or is it the other way around?

    5) One would think the SEC would be concerned that the company has been offering investors misleading information. As you point out, why does the 10k omit some valuable instructions for investors?

    6) When a company like Herbalife has to rely upon markets like Venezuela or Cambodia or Vietnam or otherwise we can take it with some degree of comfort that the pyramid scheme is getting long in the tooth.

    Q. Do you have your estimate what HLF's tom earnings would have been had Venezuela and the rest of South America been marked properly? Is it less than $4 per share?

    One way or another...all of these phantom earnings will have to be unwound.

    Hopefully due to your public disclosures Q3 will be the line in the sand.

    Great read!
    Oct 23 11:04 AM | 20 Likes Like |Link to Comment
  • Ramey Rebuttal: Herbalife Is Going To $0 [View article]
    you are missing the point focusing on "The Retail Question" need to read Burnlounge again...look at all of the case law...once you do you might figure it out...
    Oct 22 08:55 PM | 2 Likes Like |Link to Comment
  • Ramey Rebuttal: Herbalife Is Going To $0 [View article]
    Bet you a TimBit you will regret that you didn't stay short...:)

    I am most certainly short HLF common.
    Oct 22 06:28 PM | 5 Likes Like |Link to Comment
  • Will Record Q3 Earnings Help Propel Herbalife's Stock Higher? [View article]
    Short answer to your headline..."NO"
    Oct 21 03:11 PM | 8 Likes Like |Link to Comment
  • Herbalife Plans To Make Its Pyramid Scheme More Lethal [View article]
    when is your article coming?
    Oct 20 08:55 PM | 2 Likes Like |Link to Comment
  • Herbalife Plans To Make Its Pyramid Scheme More Lethal [View article]
    of course it saturates...why do you think most distributors can't make any money?
    Oct 20 08:54 PM | 3 Likes Like |Link to Comment
  • Herbalife Plans To Make Its Pyramid Scheme More Lethal [View article]
    Bob from Brazil...if I make something easier to acquire to I attract more or fewer people to the proposition?

    A. More.

    If more people are thus chasing the same finite opportunity space what is the inevitable economic result?

    not exactly Rocket surgery...

    you may be correct that the avg. loss per participant may decline...but the point of the move is to recruit a larger distributor of victims will likely increase...
    Oct 20 04:13 PM | 6 Likes Like |Link to Comment
  • The Elephant In The Room: Why The FTC Is Taking So Long To Investigate Herbalife [View article]

    Your pen is mightier than any sword. I remain optimistic that the FTC, SEC, FBI, NY AG, Illinois AG, etc. will look at the evidence and act accordingly.

    The evidence of fraud in the case of Herbalife is robust and real.

    The evidence of failure at the bottom of the distributor network is also a data point that is not easily refuted.

    Herbalife's predictions remind me of Mr. Icahn's prediction that the company wouldn't be investigated.

    Sometimes you just get bad advice.

    I am assuming that some time in 2015 the results of as interagency investigations will yield a material arrest of the Herbalife fraud, supported by evidence, Dr. Vander Nat's expert analysis and good old fashioned common sense.
    Oct 14 10:08 AM | 9 Likes Like |Link to Comment
  • Herbalife: More Smoke And Mirrors - Regulating Online Sales [View article]
    I like the fig leaf metaphor. Compliance officers at Herbalife...hmmm? Painfully obvious that anyone who actually complies with the Marketing Plan is going to be a recruiter.

    I am reminded of the story about the soul who must decide whether to go to heaven or hell. The devil gives him a tour featuring a parade of hedonism and enjoyment. The lord offers only quiet tranquility.

    Seduced by the devil's "pitch" the soul choses hell then finds himself chained to a stone for all eternity.

    When he asks the Devil "What gives? Why did you lie to me?"

    Lucifer's answer is simple.

    "Before you were only a prospect. Now, you're a client."

    Herbalife can paint its front door Gold as much as it wants. It doesn't change the inherently "hellish" nature of its pay plan which still pays to infinity, encourages people to work downline, and traps new participants in the depths of hell. Most will still fail.

    Keep writing Rogier. The truth shall set you free..:)
    Oct 13 06:17 PM | 12 Likes Like |Link to Comment
  • Herbalife reins in rogue websites [View news story]
    Websites have been shut down to protect the recruiting cartel. Top distributors complained about the success of online e-tailers. This has little to do with compliance and everything to do with channel conflict.

    When people buy product online they are not seduced into the Marketing Plan, do not pay for STS, don't strive for Supervisor, etc.

    If Herbalife's recruiting engine sits down the company folds.

    The idea that this move is about compliance is absurd.
    Oct 13 10:20 AM | 8 Likes Like |Link to Comment
  • Herbalife: Proof Management Expects Lousy GAAP Results For The Remainder Of 2014 [View article]
    C.R.A.P. accounting v. GAAP Accounting. Great analysis. I think your estimates for this quarter are too generous for GAAP. I would expect at least $1 per share charge for Venezuelan Bolivar revaluation. Herbalife may not make much this quarter at all. If management fails to mer the high-ennd of guidance on Volume Points too the stock will get flushed.

    Management will have no credibility reporting two misses in a row. Shorts are in the driver's seat here. Also, will there be an accrual for the Class Action settlement? Not sure what the right way to account for a contingent liability is?
    Oct 3 08:15 AM | 2 Likes Like |Link to Comment
  • Halloween Comes Early For Herbalife Longs [View article]
    you could be correct...more sellers than buyers = lower market clearing price...makes the buyback seem highly dilutive...
    Sep 23 10:41 AM | 3 Likes Like |Link to Comment
  • Herbalife: At This Price, You Don't Have To Like It To Buy It [View article]
    Using earnings multiples to calibrate fair value is a risky proposition.

    Is the cash-flow stream predictable? Is it perpetual? Herbalife is not inexpensive because it trades at a discount to Nuskin. Mr. Stritz and Mr. Icahn have already learned that lesson so far this year. Herbalife is only inexpensive if the market price trades at a margin of safety to the ascertainable Present Value of the future cash flows it will produce. Can you clearly concluded that this company will bring home $5 billion in future cash-flow to current stock and bondholders?

    Only on that basis can one conclude whether it is expensive or not. Housing in Florida on the same street traded at $200 per sq foot. If yo bought a house fro $175 you thought it was "cheap" Until, of course, the sub-prime crisis hit and all houses were revalued to $125 - $150 per foot. question to you is: Just because Herbalife appears to be a relative value does it make it an absolute value?

    Good luck.
    Sep 23 07:36 AM | 5 Likes Like |Link to Comment