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Quoth the Raven  

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  • Herbalife Meets The Definition Of Pyramid Scheme Set By Every Regulator [View article]
    The title has a nice ring to it. This is a great continued argument here from your last piece.

    It is crystal clear to those familiar with the rules set forth by regulators and the common law precedent set in Webster vs. Omnitrition and upheld in Fortune Hi-Tech that Herbalife is an illegal pyramid scheme.

    Today's news that LULAC is going to be protesting outside the offices of Icahn and Soros goes to show that this company is more than just a "Wall Street" problem. It's bad for the country.

    These are facts:

    1. A current HLF board member is wanted for fraud in Brazil. FACT.

    2. A current HLF board member has told potential distributors they can make millions when he knows they can’t. FACT.

    3. A current top HLF distributor is caught on video calling the marketing plan “an eventual deception” and “inauthentic”. FACT.

    4. The current HLF CEO has told people that being a distributor is recession proof and a “solution for tough economic times." FACT.

    5. Top HLF distributors, on video, push recruiting as the only way to make “lifestyle money." FACT.

    6. The company admitted that it doesn’t track retail sales outside of its distributor network and that they don't think these numbers are relevant to the business. FACT.

    7. A current top HLF distributor admits on camera that “volume points” are purchased by distributors in-network and “that’s the Herbalife business model.” FACT.

    8. Website traffic, according to Compete, has declined by about 100k visitors YOY. FACT.

    9. Herbalife seems to be running an absurd shipping and handling scheme in order to make money ( FACT.

    10. Herbalife’s gross margin has “mysteriously” stayed consistent (within 400 bps or so) for 11 years. FACT.

    This is what’s known as a “layup”. If one of the 7 regulators investigating Herbalife doesn’t have the fortitude to shut it down and start arresting top distributors, it’ll be one of the most egregiously absurd misses in regulatory history.

    But my bet is on the Harvard educated, well spoken, well-read FTC chairwoman and her staff to find that Herbalife is an illegal pyramid scheme. The writing is on the wall. And on video. The company is a criminal racket and needs to be shut down immediately before it implodes on its own.

    Earnings should be telling this upcoming week. FX costs are priced in – a slow down in recruiting isn’t. The numbers should be very interesting.

    It’s a global confidence game and it’s time to shut it down.
    Feb 24, 2015. 11:47 AM | 25 Likes Like |Link to Comment
  • Texas Roadhouse's Stunning 12% Same-Store Sales Figures [View article]
    You were all over this beat. Nice work.
    Feb 24, 2015. 10:21 AM | 1 Like Like |Link to Comment
  • Why Is BP Playing Dirtier Than Ever With Its Business Economic Loss Claims? [View instapost]
    Cogent piece, should have been a premium submission.
    Feb 24, 2015. 10:21 AM | 2 Likes Like |Link to Comment
  • The SEC Literally Defines Herbalife As A Pyramid Scheme [View article]
    Actually, it meets all of them.

    For further reading, may I suggest, "Forget Belgium, Here are 7 Reasons that Herbalife Fits the SEC's Definition of a Pyramid Scheme".
    Feb 22, 2015. 11:11 AM | 16 Likes Like |Link to Comment
  • Herbalife Primed For Positive Q4 Earnings With Improved Product Mix [View article]
    This is a patently ineffective way to perform an analysis that ignores the fact that HLF is operating one of the largest frauds in history - especially ineffective in light of the fact that HLF distributors are specifically being told with strictness that the "new" compliance regime (read: same as the old regime) doesn't permit them to sell on Amazon or eBay.

    The P/E under 10, on the other hand, doesn't mean the market takes exception to the brand, it means that there's disgustingly demonstrable evidence available to the general public that the company is operating the world's largest pyramid scheme. Any P/E above 0 indicates that people are speculating that Edith Ramirez and the rest of the Harvard Law grads at the FTC and other various agencies are incapable of analyzing the most basic of facts that all unanimously point to the fact that the company is a fraud.

    With regard to the title and the rest of this analysis, Q4 will be a disaster. Currencies will lead the charge of what crushes the numbers, dutifully followed up by the brand name dying a slow death as the commonfolk continues to learn that "Herbalife" is synonymous with "Enron" and "Madoff".

    It's a criminal racket and a fraud, and it's going to zero. End of story.
    Feb 17, 2015. 10:26 AM | 33 Likes Like |Link to Comment
  • FTC chief OK to share stage with Herbalife exec riles prominent critic [View news story]
    Consult my TipRanks page located here:

    It'll show you I've picked 72% (165 out of 225) winners in the last 2 years.

    It'll also show you the average return of my 225 picks is 14.2% in the last 2 years.

    I'm ranked 130th out of 4171 bloggers.

    Nobody picks 100%. You wannt opine over someone's losers? Do that to Cramer who is wrong more than he's right.

    When you top 72% and 14.2%, after writing almost 1,000 articles, I'll listen to what you have to say. Until then, as Nelly would say, "keep your mouth on lock."
    Feb 11, 2015. 11:09 AM | 12 Likes Like |Link to Comment
  • FTC chief OK to share stage with Herbalife exec riles prominent critic [View news story]
    "The FTC has cleared HLF"

    Ladies and gentlemen, I give you the thought process of an HLF bull.
    Feb 11, 2015. 10:57 AM | 12 Likes Like |Link to Comment
  • FTC chief OK to share stage with Herbalife exec riles prominent critic [View news story]
    1. We'll see who actually makes it to the stage tomorrow.

    2. If you think this Harvard educated Ramirez is incapable of attending an event and remaining objective on the $HLF investigation, you're nuts.

    3. Herbalife is a pyramid scheme and criminal racket. The law doesn't pander. The government will do the right thing here and mame this company.

    4. I am at my highest conviction levels I've ever been at with this short.

    That is all.

    Feb 11, 2015. 10:55 AM | 6 Likes Like |Link to Comment
  • Texas AD investigating Mallinckrodt Medicaid pricing [View news story]
    No surprise. Also no surprise that Trudeau cashed out another million in stock.

    It's only a matter of time before the Acthar farce is debunked.
    Feb 4, 2015. 10:47 AM | Likes Like |Link to Comment
  • Red Flags In Herbalife's Shipping And Handling Revenues [View article]
    This is a fantastic piece that is starting to shed some light on some things that I'd guess HLF wants to avoid talking about - and that the SEC may be very interested in.

    The fact that this company's profit seems to stem from these ridiculously absurd S&H charges - and that the company thinks they can just tuck those charges wherever they want on the P&L is fascinating.

    This is a huge deal, especially because it seems to explain the mystery of Burton's ridiculous shipping liabilities. If other top distributors are paying the same absurd amounts, we need to start asking some serious questions about who is buying what, where, and what is being shipped.

    While the company, I guess, has the right to charge whatever they want for "handling," that is an insane markup that should be disclosed somewhere.

    To me, everything about this says that there's more under the surface that is yet to be disclosed. That's why my 100+ letters to politicians on Herbalife were sent out a couple days ago. Who in the government is going to have the fortitude to stand up and stop this thing before it collapses on its own?

    If the government waits to shut this thing down before "everything" is brought to light and it collapses on its own, it's going to be a massive embarrassment. They need to get proactive and freeze this company's assets.
    Feb 4, 2015. 10:36 AM | 22 Likes Like |Link to Comment
  • Uncovering Herbalife's Suspected Illegal Operations In China [View article]
    Brilliant work. It seems HLF is definitely operating illegally in China.

    I mean - where is PwC? I can't be the only one who has seen how they seemingly reverse engineer their "hourly consulting pay" number used in China. What a farce and an insult to the intelligence of those of sound and sober mind.

    Not only that, but more work is forthcoming on how HLF is on the back end of its "pop and drop" in China. It has run out of provinces to (illegally) do business in. Even if regulators don't get to it there, I'm predicting ugly results out of China in the coming quarters. Everything suggests to me that growth there is finished and China will be one part of a coming "crap-burger" of epic proportions that this company is going to see in 2015.

    School's out for today. Catch you all soon.
    Feb 3, 2015. 11:52 AM | 11 Likes Like |Link to Comment
  • Anatomy Of A Short (Or Long) - A Live Case Study Using Herbalife - Part 1 [View article]
    Herbalife? Don't even get me started.
    Jan 29, 2015. 08:26 AM | 11 Likes Like |Link to Comment
  • Blogger says Herbalife's stable gross margins aren't surprising [View news story]
    Admittedly, the low margin variance definitely is helped by FX being in SG&A (as correctly blogged by the Skeptic) - however, the consistency of the company's margin dating back even further certainly is interesting.

    Think 31 quarters is interesting? Check out HLF's gross margin for the last 11 years:
    Jan 28, 2015. 02:23 PM | 8 Likes Like |Link to Comment
  • Herbalife's Unusual Foreign Currency Problem, Explained And Analyzed [View article]
    Or they'll shut the company down in its entirety. But you know, yeah, definitely one of the two.
    Jan 21, 2015. 03:43 PM | Likes Like |Link to Comment
  • Herbalife's Unusual Foreign Currency Problem, Explained And Analyzed [View article]
    ...and I rest my case.
    Jan 21, 2015. 03:41 PM | 4 Likes Like |Link to Comment