Seeking Alpha

Herbalife resumes trading

  • (HLF) shares down 12%.
Comments (12)
  • LouisRenault
    , contributor
    Comments (127) | Send Message
     
    Excellent! Break out the bullion!
    12 Mar 2014, 02:01 PM Reply Like
  • Dave Ritchie
    , contributor
    Comments (779) | Send Message
     
    While this development is cause for celebration in the anti-MLM camp, of which I'm a part, it's not a time to crow. IMO, it's a huge plus for consumers--depending of course on the investigation's outcome--but some investors may sustain significant losses; and that's no cause for celebration by anyone.
    12 Mar 2014, 03:10 PM Reply Like
  • 50 cent it is
    , contributor
    Comments (1461) | Send Message
     
    13 million shares traded today
    I would like to see the action in the option pit
    High drama
    12 Mar 2014, 03:30 PM Reply Like
  • Kay Herbert
    , contributor
    Comments (975) | Send Message
     
    I'm surprised how little the sp fell today. Is it because the spin put out by the longs or is HLF buying shares? We'll see how it continues the next few days.
    12 Mar 2014, 05:55 PM Reply Like
  • 50 cent it is
    , contributor
    Comments (1461) | Send Message
     
    It would be interesting to see who was trading on this info before it was public
    That is the criminal activity
    12 Mar 2014, 03:31 PM Reply Like
  • The Big Swede Ramberg
    , contributor
    Comments (16) | Send Message
     
    Dave Richtie you seem like a thoughtful intelligent person so why the anti-MLM position. MLM is a payment structure for the marketing people involved in selling a company's products. It allows hard working people with little income to create a business that is independently run by their own actions. The problem is most people need a BOSS and to be told what to do when to do it and if you don't your fired. In MLM most people fire themselves by not working hard enough and consistently enough or have the wrong company with inferior products. And Yes there are unscrupulous marketing people in MLM and there is absolutely those in traditional sales organizations that do unscrupulous things too. BOTH should be removed like a cancer. The company i work with has done that over its 30 year history and has done it to some very high level producers.
    So WHY the huge concern how the marketing arm is Paid as long as it is LEGAL?
    PS until proven different NuSkin my company has no PROVEN action being taken for significant violation of the China law. If found Guilty then Pile on the Abuse (SAME with Herbal Life) but I am betting you won't see that and anybody who thinks that NuSkin will be run out of existence is delusional. The products are compelling and in many cases life changing-just look at the only company featured for their pioneering anti-aging work with epi-genetics by the DISCOVERY Channel. Also as an important positive point. We as distributors have helped NuSkin provide 355 million nutritionally rich meals worldwide in the last 10 years helping many children to live Healthy lives and many of them have been in China.
    12 Mar 2014, 09:00 PM Reply Like
  • BornIn87
    , contributor
    Comments (109) | Send Message
     
    Probably because MLM companies sell an opportunity that only exists for those who also sell the opportunity to others. Recruits, not sales, are how you make money. A salesperson selling the product to a consumer is fully aware that they are selling their products at non-competitive prices in order to support the MLM structure above them. Anyone who values their customer wouldn't be able to sell the product without feeling like a snake. It's incredibly inefficient, and those at the top get wealthy, while those at the bottom get fleeced because the statistics (based upon rapid growth due only to large numbers of recruits getting their immediate family members to purchase junk) cannot continue their parabolic climb forever.
    13 Mar 2014, 03:49 PM Reply Like
  • Dave Ritchie
    , contributor
    Comments (779) | Send Message
     
    The Big Swede Ramberg: "...why the anti-MLM position"

     

    First of all I'm not concerned with MLM's current legality. My interest is based on moral and ethical consideration.

     

    Secondly, your desire to help make the world a better place is laudable and not at all atypical of MLM IBOs.

     

    Now, to my answer to your question:

     

    "Business for Home", an online pro-MLM journal, publishes a list of the top "8,000" income earners among MLM IBOs worldwide. They do not claim that their list is exhaustive. However, it's the most comprehensive I've been able to find.

     

    Their 2012 list of the 8,388 most successful IBOs showed annual gross incomes that ranged from $15,600 to $14.4 million. Using the World Federation of Direct Selling Associations' published figure of 90 million IBOs worldwide in 2012, my calculator says that less than one in 10,000 IBOs grossed $15,600 or more that year.

     

    Every research-based analysis I've been able to find, based on the best available data, concludes that at least 99% of IBOs sustain net financial losses over the course of their MLM involvement. These analyses tend to support the accuracy of the data I used and its calculated yield.

     

    Two dimensional graphs, including those used by many of my anti-MLM colleagues, traditionally represent the exponential growth potential on which MLM recruiting pitches are based, as a pyramid. The fact is that a pyramid representation is only accurate as a logarithmic graph, necessary in order to fit the graph onto useful media.

     

    A linear graph of a binary exponential function (base 2) with the number of progression iterations (distributor levels) possible within the total U.S. population of approximately 317 million is 28 (the exponent I'll use in the following description). If each level is one inch high and each population unit is one inch wide, the dimensions of the graph of 2 to the 28th power would be 29 inches high and over 2,118 MILES wide. By any reasonable analysis, exponential growth is unsustainable.

     

    Larger MLMs have been able to sustain themselves by demographic and geographic expansion, as well as rebranding. So long as new demographic markets continue to be identified, new countries continue to open, churn rates remain under 100% and generations continue to turn over every twenty years, a well-heeled MLM can stay afloat indefinitely. But at what cost to the overwhelming majority of "little" people who buy into MLM's illusory dream, only to suffer significant social and economic harm.

     

    MLMs, from unaware individual business-opportunity sellers to executives at the top, never disclose this information to their IBO prospects. Instead, their usual practice is to explicitly describe or imply an infinite or endless market for distributorships to their prospects. The numeric or graphic analyses I've seen them present in opportunity meetings, IBO trainings, promotional literature, compensation plans and on the internet are truncated by around the twelfth or thirteenth level. Once that level is exceeded, the implausibility of their model becomes readily apparent to even casual observers.

     

    I readily concede my anti-MLM bias. However, I believe that bias has developed pursuant to my own research, analyses and observations, all of which have also led to my counter-MLM activism.

     

    To me, this confluence of realities is indicative of every MLM's unfair and deceptive nature.

     

    That's the short answer to your question. If you'd like more detail, feel free to email me through SA's mail system and I'll be happy to correspond further offline.
    13 Mar 2014, 04:05 PM Reply Like
  • Alec Mazo
    , contributor
    Comments (43) | Send Message
     
    Maybe the following paper gives a glimpse into FTC's thinking. Peter J. Vander Nat - one of the authors - is a Senior Economist at the FTC. I think there is nothing positive here for Herbalife...

     

    http://bit.ly/1buFeS2
    12 Mar 2014, 11:08 PM Reply Like
  • Kay Herbert
    , contributor
    Comments (975) | Send Message
     
    Alec,
    Yes, great paper. Unfortunately with Madoff, we keep getting reminded on how hesitant and slow our agencies can be. Here is a bit history: http://n.pr/1a1aNjg
    12 Mar 2014, 11:31 PM Reply Like
  • LouisRenault
    , contributor
    Comments (127) | Send Message
     
    Very disapointed.
    The Stock was barely dinged. How am I suposed to make money on such a small movement?
    After all this effort, time and money from Ackman, all he can now manage is a paltry 7% change. Whats this country coming to when you can't bribe your way to another billion?
    12 Mar 2014, 11:49 PM Reply Like
  • poortorich
    , contributor
    Comments (2265) | Send Message
     
    I too am disappointed that the price did not drop that much.
    Fear/panic is very good for long term investors.
    13 Mar 2014, 12:42 AM Reply Like
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