Seeking Alpha

Law professor Daniel Ravicher says Herbalife's (HLF) business partners, eBay (EBAY), FedEx...

Law professor Daniel Ravicher says Herbalife's (HLF) business partners, eBay (EBAY), FedEx (FDX), and NYSE Euronext (NYX), are now legally obligated to investigate claims HLF is a pyramid scheme - and as a shareholder he's demanding they do so. Ravicher says HLF's model - paying out more for onboarding new distributors than for product sales - makes it a pyramid, and thinks companies will be forced to cut ties with HLF, strangling it.
From other sites
Comments (13)
  • Ron Reed
    , contributor
    Comments (285) | Send Message
     
    This is news? I thought we all agreed to this months ago...
    5 Feb 2013, 02:22 PM Reply Like
  • Rbbrooke
    , contributor
    Comments (61) | Send Message
     
    Any one that states that HFL pays out more to recruit new reps than for product sales is so blatantly bias as to be liable for fraud.
    HFL does not pay to recruit. HFL just like 2000 other MLM companies pays 40-50% of revenue on THE SALES to sales leaders as an incentive to build the sales force to begin with.
    Do your homework before posting fraudulent opinions as facts.
    5 Feb 2013, 02:28 PM Reply Like
  • Ron Reed
    , contributor
    Comments (285) | Send Message
     
    Spoken like the base of a pyramid
    5 Feb 2013, 02:33 PM Reply Like
  • axd07
    , contributor
    Comments (61) | Send Message
     
    I don't understand how this HLF business is legal!? There is no difference between HLF and Bernie Madoff, except one sold a service and HLF sell (some goods) but mostly sells fake dreams.
    5 Feb 2013, 02:39 PM Reply Like
  • baole1985
    , contributor
    Comments (3) | Send Message
     
    agree
    5 Feb 2013, 05:53 PM Reply Like
  • fvroach
    , contributor
    Comments (2) | Send Message
     
    Losing 35lbs and reducing my cholesterol from 228 to 171 is a not a "fake dream". The products are great. Building a sales team is hard. Most do not make because most do not have what it takes to run a business. You sell the product; you present an opportunity. 1000 conversations > 200 prospects > 50 resellers > 5 team members.
    5 Feb 2013, 05:59 PM Reply Like
  • axd07
    , contributor
    Comments (61) | Send Message
     
    it is a fake dream of getting reach, you can just buy another product for half the cost and get the same results. Instead you pay more because you have to maintain the pyramid...even HLF is telling you they are in the bussines of selling you a business opportunity (!) not some kind of health product...
    5 Feb 2013, 06:37 PM Reply Like
  • lucagrs
    , contributor
    Comments (68) | Send Message
     
    If you want an unbiased opinion (fat chance), you should look at this:
    http://bit.ly/WN2C3g
    5 Feb 2013, 04:51 PM Reply Like
  • erikbullock
    , contributor
    Comments (2) | Send Message
     
    im short and intend on staying that way. willing to lose my whole position because herbalife is a pyramid scheme. if my position goes to $0 I guess I will have to admit im wrong, but thus far I am in good shape. Wish that 13 point drop yesterday would've held though.
    5 Feb 2013, 05:53 PM Reply Like
  • C2KBlast
    , contributor
    Comments (56) | Send Message
     
    Selling a product is indeed the difference. That will be the scope of any possible investigations. Also, although your 'dream' point is not relevant to whether HLF is a pyramid or not, selling dreams is what advertising and the free market are about. Ask any salesperson, no matter what the product. No one sells the side effects.
    5 Feb 2013, 05:54 PM Reply Like
  • axd07
    , contributor
    Comments (61) | Send Message
     
    its actually very relevant, if they make more money from selling dreams then from selling products, that is the definition of a pyramind scheme.
    Most 'distributors' buy the HLF product for their own consumption, and a many buy and throw them away just to continue getting a commission...that's not product retail, that's a pyramid scheme. I have to say it's very interesting how it's setup, it's a very complex scheme, stil a pyramind scheme...
    5 Feb 2013, 06:34 PM Reply Like
  • GNPOWER
    , contributor
    Comments (2) | Send Message
     
    In this company when you get to buy at 50% off(highest level of discount) you only get paid "differences" from the people that are below you. You can buy all the products you want and you won't get paid a penny or any differences or commissions. So buying just to throw away to get paid wouldn't be that smart. Lets get facts straight. Recruiting fee goes straight to the company and nothing to distributors...
    6 Feb 2013, 03:45 AM Reply Like
  • axd07
    , contributor
    Comments (61) | Send Message
     
    that's just not true...my neighbor has to spend about 1.000 every quarter to make sure that his 1.300 -1.400 commision comes...he gets all this product that he has no intention of selling (nor he has any buyers)...that's a pyramid scheme... he even tried to have HLF not even ship the products to him so he doesn't pay the shipping (huge shiping fees btw) but that didn't work lol, they want to chash on those shipping charges...
    6 Feb 2013, 04:53 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector