In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
"He clearly has a good deal of conviction regarding his thesis, but it is increasingly difficult for anyone else to be short the stock, as it has gotten increasingly expensive to short HLF. "
Okay, so how is that an argument against the pyramid scheme thesis?
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
The SEC was warned many times about Bernie Madoff by Harry Markopolos and they were investigated and found nothing.
Bernie Madoff's scam was $50 billion dollars vs. the $3 billion of Herbalife.
It's hard to claim that the SEC missed something that is at least 10x bigger than Herbalife when they've been told about it. Considering that the SEC investigated and missed Madoff's $50 billion scam years before they finally caught it, we can't presume their investigations are effective.
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
It's worth noting that the "MLM models" have been found to be pyramid schemes by FTC in the past. It isn't Ackman's personal opinion as you suggest.
MLM distributors who get burned are conditioned to believe that it is their own fault as "the business model works, the only variable is you." They have recruited their friends and family and don't want to admit fault.
As Ackman showed, only about ~10% of distributors renew their distributor agreements. If the business model is so appealing why do ~90% leave?
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Are there big GDP countries that Herbalife can still expand into? Maybe someone could create a list of big countries that Herbalife isn't already in.
I will add that a bad economy also helps Herbalife's growth. When people can get well paying jobs, they aren't desperate enough to take any "business opportunity" that comes along. A high unemployment creates a bigger market for Herbalife.
Herbalife could do a lot of clarification by breaking out the sales by country throughout their history. It would be a very easy chart and it would go a long way to proving or disproving Ackman's pop-and-drop theory.
Herbalife's accounting people should have been able to put this out in 24 hours after the presentation. Anyone who was long HLF should be asking where it is.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Yeah, Ackman probably looked at what Einhorn asked and HLF's inability to answer and realized that they were a pyramid scheme. I wrote an article on it at the time: http://bit.ly/ODm76Q.
Nothing wrong with realizing that a company is defrauding people and shorting their stock.
What are you going to wait and see about the charity thing (and why do you put charity in quotes)? Do you think Ackman is going to risk his reputation by not donating the money to charity. Herbalife would love for Ackman to not donate the money to charity, so that they can attack him. Do you think Ackman is going to leave himself vulnerable like that? Not likely.
If you know something about the SEC investigating Ackman then disclose it. If not, there's no need to speculate on rumors without a shred of evidence.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
speculative said, "If all companies operated the way the MLM's do, our world would be so far better off than where we are today."
Hmm, considering that they charge anywhere from 3x to 10x for their products and well over 99% of people lose money in the business, I can't see how we'd be better off.
Thanks for illustrating the "building a team" thing. Unfortunately, that is often a codeword for creating a pyramid scheme in MLM.
Is that person who is making 500K selling millions of dollars of product to people outside of the MLM company? I've never seen a case where they do. If they don't the FTC says it is a pyramid scheme.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
He's invested to give the money to charity. Something good should come from the pyramid scheme.
Yeah Ackman must have used a cohort to pump Herbalife, it wasn't related to their very good balance sheet and profits.
If you saw Ackman's presentation he most certainly did his due diligence in HLF. How can you even suggest otherwise?
Ackman is trying to help the people at the bottom who are losing thousands of dollars. They are being defrauded out of what little money they have, which is the very last thing they need when they are trying to make ends meet.
If you think Ackman's claims are bogus maybe you can detail specifically which ones are wrong and why. I haven't seen anyone point out anything yet.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Pinocchio1 said, "And who is Ackman to take a general term 'pyramid' and 'define' it?"
Ackman used the FTC's definition, not his own.
Ackman showed various countries that are shrinking. Yeah you don't cover US shrinking with El Salvador, but you can with a combination of a bunch of other countries.
The Belgian ruling explained in detail why they are a pyramid scheme. The other 80 countries may be too busy to look into it. Don't confuse their inaction with acceptance.
You know that the SEC missed Bernie Madoff's scheme for years right? They were told about it and investigated it and missed it.
Why don't you just show us where Ackman presentation is wrong?
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
No reason to consider that scenario. It is outlandish.
Ackman couldn't pay Einhorn enough to bad mouth a company and Ackman could just bad mouth them himself if he wanted to. Also Herbalife dropped a ton, so there's no logic behind the thinking that "it didn't drop enough."
Finally there's one more point... Einhorn asked very relevant questions that HLF should have answers to (sales to others outside the organization) and HLF admitted that they didn't have answers. HLF further showed their ignorance of their own MLM industry by claiming that isn't important (the FTC says otherwise). Ackman put together 300+ slides of proof. There's a big difference between saying that a company is bad, and proving it like Ackman did.
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
There's no room for logical arguments here DoghouseReilly ;-). People would rather question Ackman's motives and claim that he's manipulating the stock.
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
What do they have to lose with a point-by-point rebuttal? At least it gives them a chance of winning in the court of public opinion. Right now, they are getting slaughtered there and their lack of immediate response is a big problem for them.
I didn't think about reporting year-end portfolios, but I guess that's a double benefit for Ackman. Whether that is the real reason for the timing he's able to claim it isn't and has a very good reason for it with the distributor requalification.
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
When you say "before presentation" do you mean before he started creating the presentation in May or before he gave the presentation this past week? Those are very significant different times.
Did you expect him to spend 7 months putting together proof that Herbalife is a pyramid scheme and then not present it?
It's pretty easy to see it isn't stock manipulation because he's put out truthful information that was already publicly available. Anyone is free to do this on any company long or short.
If it was was easier to make a stock go down than up, most stocks would be going down because people would do it.
He's doing everything he can do to not get benefits. If a policeman catches a crook and people view him as a good officer or a hero, those are benefits. It doesn't mean that the policeman shouldn't catch the crook. We shouldn't say that the policeman has questionable motives.
He's simply doing the best he can to make the world a better place. There's always going to be benefits for those who do that.
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
Okay, so how is that an argument against the pyramid scheme thesis?
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
Bernie Madoff's scam was $50 billion dollars vs. the $3 billion of Herbalife.
It's hard to claim that the SEC missed something that is at least 10x bigger than Herbalife when they've been told about it. Considering that the SEC investigated and missed Madoff's $50 billion scam years before they finally caught it, we can't presume their investigations are effective.
In Defense Of Herbalife: Arguments Against Ackman's Short Thesis [View article]
MLM distributors who get burned are conditioned to believe that it is their own fault as "the business model works, the only variable is you." They have recruited their friends and family and don't want to admit fault.
As Ackman showed, only about ~10% of distributors renew their distributor agreements. If the business model is so appealing why do ~90% leave?
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
I will add that a bad economy also helps Herbalife's growth. When people can get well paying jobs, they aren't desperate enough to take any "business opportunity" that comes along. A high unemployment creates a bigger market for Herbalife.
Herbalife could do a lot of clarification by breaking out the sales by country throughout their history. It would be a very easy chart and it would go a long way to proving or disproving Ackman's pop-and-drop theory.
Herbalife's accounting people should have been able to put this out in 24 hours after the presentation. Anyone who was long HLF should be asking where it is.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Here's just one example from back in May: http://seekingalpha.co...
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Nothing wrong with realizing that a company is defrauding people and shorting their stock.
What are you going to wait and see about the charity thing (and why do you put charity in quotes)? Do you think Ackman is going to risk his reputation by not donating the money to charity. Herbalife would love for Ackman to not donate the money to charity, so that they can attack him. Do you think Ackman is going to leave himself vulnerable like that? Not likely.
If you know something about the SEC investigating Ackman then disclose it. If not, there's no need to speculate on rumors without a shred of evidence.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Hmm, considering that they charge anywhere from 3x to 10x for their products and well over 99% of people lose money in the business, I can't see how we'd be better off.
Thanks for illustrating the "building a team" thing. Unfortunately, that is often a codeword for creating a pyramid scheme in MLM.
Is that person who is making 500K selling millions of dollars of product to people outside of the MLM company? I've never seen a case where they do. If they don't the FTC says it is a pyramid scheme.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Yeah Ackman must have used a cohort to pump Herbalife, it wasn't related to their very good balance sheet and profits.
If you saw Ackman's presentation he most certainly did his due diligence in HLF. How can you even suggest otherwise?
Ackman is trying to help the people at the bottom who are losing thousands of dollars. They are being defrauded out of what little money they have, which is the very last thing they need when they are trying to make ends meet.
If you think Ackman's claims are bogus maybe you can detail specifically which ones are wrong and why. I haven't seen anyone point out anything yet.
Is Ackman's Hatchet Job On Herbalife Justified? [View article]
Ackman used the FTC's definition, not his own.
Ackman showed various countries that are shrinking. Yeah you don't cover US shrinking with El Salvador, but you can with a combination of a bunch of other countries.
The Belgian ruling explained in detail why they are a pyramid scheme. The other 80 countries may be too busy to look into it. Don't confuse their inaction with acceptance.
You know that the SEC missed Bernie Madoff's scheme for years right? They were told about it and investigated it and missed it.
Why don't you just show us where Ackman presentation is wrong?
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
Ackman couldn't pay Einhorn enough to bad mouth a company and Ackman could just bad mouth them himself if he wanted to. Also Herbalife dropped a ton, so there's no logic behind the thinking that "it didn't drop enough."
Finally there's one more point... Einhorn asked very relevant questions that HLF should have answers to (sales to others outside the organization) and HLF admitted that they didn't have answers. HLF further showed their ignorance of their own MLM industry by claiming that isn't important (the FTC says otherwise). Ackman put together 300+ slides of proof. There's a big difference between saying that a company is bad, and proving it like Ackman did.
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
I didn't think about reporting year-end portfolios, but I guess that's a double benefit for Ackman. Whether that is the real reason for the timing he's able to claim it isn't and has a very good reason for it with the distributor requalification.
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
Ackman's already up big on the trade, the stock would have to triple overnight before they lose too much money.
Ackman's Case On Herbalife Doesn't Live Up To His Short [View article]
Did you expect him to spend 7 months putting together proof that Herbalife is a pyramid scheme and then not present it?
It's pretty easy to see it isn't stock manipulation because he's put out truthful information that was already publicly available. Anyone is free to do this on any company long or short.
If it was was easier to make a stock go down than up, most stocks would be going down because people would do it.
He's doing everything he can do to not get benefits. If a policeman catches a crook and people view him as a good officer or a hero, those are benefits. It doesn't mean that the policeman shouldn't catch the crook. We shouldn't say that the policeman has questionable motives.
He's simply doing the best he can to make the world a better place. There's always going to be benefits for those who do that.