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The hits just keep coming to Herbalife (HLF -8.4%), as the shares sank into the close following...

The 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.
Comments (12)
  • well... that sounds really awful for HLF bulls. but at the same time, nearly everyone that joined this Fortune Hi-Teck company was losing money. and a lot of it. from my understanding, HLF only costs around $70 to become a distributor. At the very least it's a lot less harmful pyramid scheme?
    28 Jan 2013, 04:37 PM Reply Like
  • Actually most people pay $299 to become a distributor, and soon find out that is dead money unless they pay an additional $2k-$3k to buy their way up to a higher place in the pyramid...but don't take my word for it:

     

    http://bit.ly/XiSRYu
    30 Jan 2013, 11:22 AM Reply Like
  • I bought more calls today.

     

    This is fun.
    28 Jan 2013, 05:11 PM Reply Like
  • Michael O. Johnson's days as a free man are now numbered. I've been shorting HLF calls but I could care less about the money. I am glad to know TwistTie is a satisfied customer.

     

    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.
    28 Jan 2013, 06:50 PM Reply Like
  • You are a moron. Plain and simple. And an ignorant moron as well.
    28 Jan 2013, 10:40 PM Reply Like
  • OOO I love stock traders that care so much for their fellow man...
    28 Jan 2013, 08:31 PM Reply Like
  • I used to read an article in "USA today" about Fortune Hi-Tech. Their compensation plan is very similar to Herbalife. If so, Herbalife will be the next on this way.
    29 Jan 2013, 03:30 AM Reply Like
  • Herbalife is not FHTM. FHTM has been under regulatory scrutiny for years. For those that know the difference - it is night and day.

     

    If you are in betting mood, mark words, HLF will not face the same fate as FHTM.
    29 Jan 2013, 04:30 AM Reply Like
  • The fact that some guy worked at Herballife in the past is just plain news chatter and is irrelevant to solid financial analysis of Herballife.
    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!
    29 Jan 2013, 04:41 AM Reply Like
  • I have done events for Herbalife, and I can tell you that the pyramid nature of the business is all to clear to people who work on and attend these events...hype of how much you can make, glorification of those at the top of the pyramid, and nothing but desperation and hope for those who come in at the bottom....

     

    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.
    29 Jan 2013, 05:00 AM Reply Like
  • I said that this would probably not happen, but it definitely means the game is up for HLF. Esp. post madoff they are forced to investigate hedge fund substantiated tips because an HF insider tipped them to Madoff.

     

    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.
    29 Jan 2013, 07:41 PM Reply Like
  • !st -SEC was on to Madoff forever. They let it slide. Do your homework.
    !!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
    31 Jan 2013, 11:05 PM Reply Like
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