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The hits just keep coming to Herbalife (HLF -8.4%), as the shares sank into the close following...
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Monday, January 28, 4:03 PM ETThe hits just keep coming to Herbalife (HLF -8.4%), as the shares sank into the close following the FTC's announcement that regulators have seized the assets of Fortune Hi-Tech Marketing, alleging the company is a pyramid scheme. Although HLF wasn't mentioned in the announcement, Fortune Hi-Tech's Chief Analytics Officer, Simon Davies, worked at Herbalife for 11 years and was the company's Director of Internal Audit.
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This is fun.
The money is really blood money as Ackman put it. The most important thing is spreading the word about the criminal activity of these shysters at Herbalife.
If you are in betting mood, mark words, HLF will not face the same fate as FHTM.
I think too many people are starting to opine on what a pyramid is without have any understanding as to the legal definition. Does an upline "sell" the right to become a distributor and make money on the sale of that right? Or, do they earn an over-ride based upon what that downline generates? The two are quite distinct.
However, the naysayers are satisfied to muddy the waters and create negativity and fear to drive the share price down.
I think there will be some bargains here as share prices fall on nervous news while the company continues to perform well.
I am long on HBL but have written calls in the interim as both sides jockey for position. I am getting paid to watch this movie!
Ackman is going to ride this one all the way to zero, and I will track it on its downward trajectory as a person who has seen the dark side of HLF and how it affects those who come into the scheme.
Hi Tek was them offing the little fish worst offender. Now they move up the chain.
I would short NUE rather than HLF since its HTB (both prob are now that i think about it).
The stock will probably rise again, but any traction above the pivot of this 44-45$ will be weak, because of fear that an investigation could be announced at any moment--it hit it for $4 on something tangentially but clearly related..now more are hitting the exits
The gamble here was right at the beginning and it was free money. That's because there couldn't possibly have been enough time for the FTC to announce an investigation between the bottom (24.25) and the exit point (i got out at 35, you could easily gone to 44).
Now, its radioactive. It will go all over the place, sometimes up, but its about to implode.
!!nd -$HLF is a GLOBAL organization. Don't you find yourself a tad bit ignorant to assume that because you did one event for someone that this is exactly how everyone does their shows? Most of their sales are overseas. I suppose the FTC is going to Machu Pechu and breaking up a Shake gathering one Friday morning because there are Pyramids in central America? C'mon! HLF just opened China 6 months ago. China has to approve every district they are in, which they have done. China doesn't allow ANY off color money schemes there. The most recent FHTH deal happened in only 3 states out of 50. Kentucky, Ha! $HLF is in CA. There are a lot more looneys ahead of a company of $HLF caliber in the queue. Oh, by the way, FHTH isn't gone. They are awaiting trial in which cases prior they paid fines to help keep the states lights on then went their way. This will be going on for many a squeeze before it's over. Grab a protein bar and get ready for Act IV...LOL