Yes, but stock promoters are given a free pass even though its the same crap. I've seen the Herbalife CEO pump his stock numerous times on MadMoney. I'm all for an even playing field. If the CEO can pump his stock anytime he wants (and Cramer unquestioningly eats it up), then certainly a short seller can make his case for why the company is a pyramid scheme.
Herbalife (HLF) Exposed!
- Thread starter lwlee
- Start date
Yes, but stock promoters are given a free pass even though its the same crap. I've seen the Herbalife CEO pump his stock numerous times on MadMoney. I'm all for an even playing field. If the CEO can pump his stock anytime he wants (and Cramer unquestioningly eats it up), then certainly a short seller can make his case for why the company is a pyramid scheme.
For Bill Ackman's thesis to ultimately play out, meaning the company goes bankrupt, the FTC has to say that Herbal Life is a pyramid scheme. If that happens Herbal Life goes poof. I think there is only a small chance of this happening.
Regarding the January buys for nutritional drinks, I doubt that there will be much impact. The average Joe doesn't know who Ackman is or familiar with his accusations. Heck, a lot of people still don't know what the fiscal cliff is and the issue has been televised every night. My point: there will be no "run on the bank", because the people involved with Herbal Life are probably not aware as to what is going on.
Regarding the January buys for nutritional drinks, I doubt that there will be much impact. The average Joe doesn't know who Ackman is or familiar with his accusations. Heck, a lot of people still don't know what the fiscal cliff is and the issue has been televised every night. My point: there will be no "run on the bank", because the people involved with Herbal Life are probably not aware as to what is going on.
Well said. Everyone will be better off the more level the playing field is so the public doesn't just hear excessive cheerleading of every company. Short sellers are the counter-balance to management and lots of analysts.
That's a valid point
This whole thing sounds just like Visalus to me. A meal replacement shake owned by Blyth. (BTH) I was convinced to go to a Visalus "meeting" at a local bar last January, and realized it was the same type of mlm crap. I decided to try 2 months worth of shakes just to see how I liked them, and 11 months later I still have a month and a half worth of shakes left.
Not a big fan of MLM and ingredients I can't pronounce.
Not a big fan of MLM and ingredients I can't pronounce.
Don't know too much about Amway's internal structure since they are private. But the fact that Herbalife is public and has to expose their internal dealings allows guys like Ackman to dig deeper than FTC. Let's be honest, FTC doesn't have smart guys like Ackman. His very compelling argument showed that Herbalife really WASN'T willing to buy back excess inventory. Anyone trying to do so was kicked out. And distributors ARE paid to recruit more people. The carrot on the stick is for all wannabe distributors to get to higher levels which can only happened if they recruit.
Quote from Pekelo:
So in plain English they DIDN'T have a viable product.
The US courts have ruled Amway and Herbalife several times legal. Also, some of Herbalife's products although may be overpriced but seems to be OK. If they were shitty, they couldn't stay in the business.
"In a 1979 ruling, the Federal Trade Commission found that Amway does not qualify as a pyramid scheme because distributors were not paid to recruit people and had to sell products to get bonus checks, and the company was committed to buying back its distributors' excess inventory."
Not a crook, just a market manipulator. And that is supposed to be illegal. Now I agree with the guys above, if you can lie and try to manipulate a stock long, you can do it short too.
He obviously didn't act out of kindness and to rise public awareness. He would look more credible without the shitload of puts...
Anyhow, I tried to find a US court case where Herbalife was found to be a pyramid scheme (which it is), but they always settled out of court or just paid without admitting guilt. Also, there is a conflict of interest for any municipality, because they pay huge taxes where they are located, so it is counter productive for any city to close them down...
Quote from Pekelo:
Not a crook, just a market manipulator. And that is supposed to be illegal. Now I agree with the guys above, if you can lie and try to manipulate a stock long, you can do it short too.
He obviously didn't act out of kindness and to rise public awareness. He would look more credible without the shitload of puts...
Anyhow, I tried to find a US court case where Herbalife was found to be a pyramid scheme (which it is), but they always settled out of court or just paid without admitting guilt. Also, there is a conflict of interest for any municipality, because they pay huge taxes where they are located, so it is counter productive for any city to close them down...
Ackman said that he has not shorted through PUTs. Only stocks.
Quote from Pekelo:
Not a crook, just a market manipulator. And that is supposed to be illegal. Now I agree with the guys above, if you can lie and try to manipulate a stock long, you can do it short too.
He obviously didn't act out of kindness and to rise public awareness. He would look more credible without the shitload of puts...
Anyhow, I tried to find a US court case where Herbalife was found to be a pyramid scheme (which it is), but they always settled out of court or just paid without admitting guilt. Also, there is a conflict of interest for any municipality, because they pay huge taxes where they are located, so it is counter productive for any city to close them down...
As long as he doesn't say anything that's not true then how is it market manipulation?