Thread: Herbalife News Stories

The Droid has continued to post, there was one post about Tony Robbins. The most recent post is about an Herbalife seminar he attended. Just a heads up - I keep getting errors when I try to post there - hope you'll have better luck.

The Salty Droid – Hurricane Herbalife

Article is mainly about Herbalife in Columbia.

"Despite its troubles in the US, after its first full year of operation in Cambodia, Herbalife says it sees “no obstacles to growth.”

“The case that happened in America did not happen in Cambodia,” said country manager Sin Dina.

Dina touted Herbalife’s memorandum of understanding with the Anti Corruption Unit, signed on December 9 last year, as proof that the company “fully complies with the laws of Cambodia”.

“We believe Cambodia needs nutritional products for a healthy life,” he said. “In life, you don’t need only dollars.”

Some crazy stuff in the article:
Herbalife sees

"Herbalife said Johnson, who is also chairman, received total compensation of $6.73 million last year, down from $10.5 million in 2013, mainly because he did not receive the incentive plan compensation of $3.7 million he got the prior year."

...

"Explaining its decision to not pay out incentive awards to Johnson and other top executives, Herbalife said target amounts for the applicable performance goals were not met, such as levels it set for earnings per share and sales growth in 2014."

Full story:

Herbalife cuts pay of CEO Johnson 36 percent after missed targets | TODAYonline

"WASHINGTON (Reuters) - Hedge fund mogul William Ackman, who has spent more than two years accusing Herbalife Ltd <HLF.N> of running a pyramid scheme, said on Monday that shutting down the company is "one of the most important things" he can do."

...

"Ackman said that when he first bet against Herbalife, he had not anticipated that another billionaire investor, Carl Icahn, would come in, take a long view on the company and "go on CNBC once a week saying how great the company was and how bad I was."
Had Icahn not shown up, Ackman said, the whole thing would be over in a few months and Herbalife's alleged pyramid scheme would have collapsed."

Full story:

https://ca.news.yahoo.com/ackman-say...1--sector.html

Originally posted by RealScam member Luzer here.

I'm posting the article here as it's an important development in the Herbalife News events:

"(Reuters) - U.S. federal law enforcement agencies contacted several top Herbalife Ltd <HLF.N>
members last week seeking information on their business practices, CNBC reported, citing sources
familiar with the matter.

The inquiries are focused on the activities of about 10 top Herbalife members, CNBC said, citing sources.
The company is offering members assistance in obtaining legal counsel, although it is unclear how
many have opted for representation, CNBC said."

Full story:
http://finance.yahoo.com/news/top-he...8--sector.html

The FTC began investigating Herbalife in March 2015. It's over a year now. I wonder when they'll issue a ruling and I wonder if the have the will to shut down this scam?

Herbalife Under Fire From State Senator Seeking Crackdown - Bloomberg Business

Herbalife Ltd. has come under attack from a New York state senator and public advocate, who called the company a pyramid scheme and proposed cracking down on its sales practices.
State Senator Jeff Klein, working with Public Advocate Letitia James and advocacy group Make the Road New York, said in a report on Tuesday that they compiled data on 56 victims, who filed complaints against Herbalife since 2004, they lost an average of $20,000. The investigation also looked at 60 so-called nutrition clubs -- the groups that help sell Herbalife’s weight-loss shakes and supplements -- in the Bronx, Queens and Brooklyn. Klein and James plan to introduce a bill in the coming weeks that will impose stricter regulations on multilevel marketing firms like Herbalife, which rely on independent distributors.
Herbalife “needs to be held accountable,” according to the report. “For too long the company has masked an illegal pyramid scheme.”
Pershing Square

Herbalife’s foes also include billionaire hedge-fund manager Bill Ackman, who began calling the company an illegal pyramid scheme in 2012. Ackman’s firm, Pershing Square Capital Management, bet $1 billion against the stock at the time. It also has hired outside firms to investigate Herbalife.....

FTC Probe

Herbalife has repeatedly denied Ackman’s accusations, but the criticism has prompted a probe by the U.S. Federal Trade Commission.
“We look forward to working with anyone who is interested in making the industry stronger,” Herbalife said in an e-mailed statement. The company is reviewing the report......

More Transparency

Klein’s proposed bill would require multilevel marketing firms to be more transparent about how well the people who try its strategies perform. This would include average income and franchisee turnover.
One of Ackman’s main points is that Herbalife distributors are compensated more for recruiting people to the business, rather than selling products to consumers. That’s seen as a hallmark of pyramid schemes. Herbalife has countered this argument by saying it doesn’t record who is the end user because it only sells to distributors. It has also pointed to third-party surveys that show its products have about 8 million customers in the U.S.
Klein and his partners said their investigation found Herbalife distributors hyped the health claims of the company’s products.....

Companies like Herbalife “set up rules and regulations to avoid being categorized as running illegal pyramid schemes as defined by the FTC, but in reality the rules are not enforced,” according to the report. “Instead, the company turns a blind eye to the illegal pyramid scheme it promotes.”

What Will Happen To Herbalife When The Government Kills The 'Golden Goose'? - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Matt Stewart
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What Will Happen To Herbalife When The Government Kills The 'Golden Goose'?

Nov. 4, 2015 1:31 AM ET | 22 comments | About: Herbalife Ltd. (HLF)
Disclosure: I am/we are short HLF. (More...)











...Investors who own Herbalife (NYSE:HLF) were treated to Q3 earnings after the close today. Or were they tricked? With earnings reported so close to Halloween, one has to wonder......


As we look at this quarter's results, some interesting data points pop out. First, the company started the year with 4.0 million Members. As of the end of Q3 the company has 4.0 million Members. According to the company's own regional key metrics disclosures, 1.6 million new Members joined Herbalife YTD. Solving for X, that means 1.6 million people churned out of the pyramid since December 31. That is certainly some impressive velocity. Annualized, over 2 million people will quit Herbalife in 2015 alone. I like to call that data point "Churn". I think the FTC also pays attention to this data point....

However, they certainly seem to mind when your marketing plan promotes recruiting, inventory loading, and an endless chain of salespeople all trying to qualify to advance in a money making venture.....

Ask anyone at Vemma what the FTC thinks about endless recruiting chains. I am sure they will be happy to let you know that they just didn't see the injunction coming until it was too late....


As lottery players head for the exits and recruiters aren't able to, well, recruit. Who knows how far the company's revenues and cashflow might fall?...

Herbalife tells us they are excited for 2016. Sandbag earnings guidance of $4.70 or so is the order of the day. The company's bankers are looking forward to another material downstroke in March of 2016. The company continues to recruit over 500,000 new members a quarter. And so, the beat goes on. Until, of course, it doesn't....



Honestly, at this point, how likely is it that the government comes back with a Naked Gun "There's Nothing to See Here" v. some sort of smoking gun?....


Herbalife is a global pyramid scheme folks. Its marketing plan is the very definition of a "pay to play" incentive scheme. Participants buy inventory because they think it is going to help them get rich and recruit others to do the same. This is a big "no no" according to the law......


Unfortunately for MOJ and his "Golden Goose", their days are numbered.....


Because companies that rely on an endless chain of recruits for sustenance are downright illicit. It's really just as simple as that.

There are a few juicy snippets to entice everyone to read the whole article. It is definitely worth popping over to Seeking Alpha. Typical loss of 50% of the sales force yearly. And, that will only get worse as so many have already been burned in this deal. The Titanic is sinking fast!

Another incredible read:

Have Herbalife Executives Already Confessed Publicly? - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Herbalife Earnings Preview: Key Things To Watch - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Herbalife is a pyramid scheme. Perhaps the most critical data points to look for in this earnings release are as follows.

1. What is the size of the pyramid? You will be able to find that information on the first few pages of the 10k.
2. Did the pyramid grow at all year over year? You will be able to find that data point by comparing last year's 10k to this year's 10k.
3. How many people did the company recruit last year? This information is found at ir.herbalife.com in the Regional Key Metrics disclosure filed quarterly. You can find it here.
4. How many Members churned out of the pyramid? This data point is arrived at using simple Algebra. Size of Pyramid a Year Ago + New Members Recruited - X = Size of Pyramid Today where X = the number of people who quit. I like to call these people victims....

The company simply must recruit roughly 2 million people per annum in order to sustain its cashflow....Herbalife Sales Leaders have to prospect somewhere between 10 million and 100 million people annually worldwide to recruit 2 million new people.
I consider this mathematical reality an obvious headwind for the company considering the fact that we know so many Herbalife Members last less than 2 years with the company....
the company is running out of countries to market. Secondly, in all likelihood material changes are coming to the company's Marketing practices due to FTC enforcement. Finally, because the pyramid has grown to be so large at 5 million Members total, growth becomes extremely difficult due simply to the law of large numbers....to avoid all of this risk as a long you have to bank your money on one simple thing. I think they call it RECRUITING!...

The article is an excellent, informative and wickedly humorous read.

Yahoo News is reporting



You can read the original story here on FINANCE.YAHOO.COM

Our dear colleague has another fabulous article out:

Herbalife's And Other MLMs' 2015 Data Show Their Growth Era Has Ended - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Herbalife's And Other MLMs' 2015 Data Show Their Growth Era Has Ended

Mar. 7, 2016 4:32 PM ET|
About: Herbalife Ltd. (HLF), Includes: NUS, USNA


Robert FitzPatrick ⊕Follow (235 followers)

Consumer Educator
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Website(48 clicks)


Summary

Apart from fraud charges, the global performance of Herbalife and other large MLMs shows their era of "growth" is over. The change is not cyclical, but inevitable and irreversible.
Growth in MLM is not real. It relies on new geography. There is no sustained base of brand loyalists or successful salespeople.
For individual recruits, MLM "growth" from recruiting is a requirement. No one profits by personal "direct selling."
While expansion is always promised, data now show contraction, revealing to regulators and investors MLMs inherent flaw and its basis in deception.
Herbalife, Nu Skin and Usana illustrate the reality of saturation. All depend now on China and other new markets, the proverbial "last ones in." China "growth" is ending.

An incredible read. The only way growth will happen for these scams is to go interplanetary!

Staying Short Herbalife: The Discount Customer Argument Does Not Hold Water - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Short Herbalife: The Discount Customer Argument Does Not Hold Water

Mar. 7, 2016 10:56 AM ET|
19 comments |
About: Herbalife Ltd. (HLF)


Connor Davidson
Deep value, value, contrarian, long-term horizon
Send Message|
Website(2 clicks)


Summary

Herbalife claims that the majority of distributors sign up only for a discount on the products.
The question is who recruited them and why become a discount customer?
An analysis of the compensation plan shows that there is little incentive to recruit discount customers.
Herbalife’s claims do not match up to the compensation statement or previous SEC filings.
The company should implement a “discount customer” program and disclose honestly the numbers participating.

Failed distributors drowning in overpriced, overhyped products and losing their shirts to be exact with lots of wild tales about the motivations for purchases!

Bill Ackman Was Right About MBIA And He Is Right About Herbalife: Will The "Contested Complaint" Be Filed Soon? - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Bill Ackman Was Right About MBIA And He Is Right About Herbalife: Will The "Contested Complaint" Be Filed Soon?

Mar. 9, 2016 1:59 PM ET|
About: Herbalife Ltd. (HLF)


Eric Moore ⊕Follow (70 followers)

Long/short equity, special situations, value, Relative Value Arbitrage
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Summary

Herbalife executives are making the same failed arguments that JewelWay, Omnitrition, Burnlounge and Vemma made when accused of running a pyramid scheme.
Michael Johnson's own words confirm he is attempting to count distributors as customers.
When compared side by side with previous pyramid prosecutions such as FTC V Vemma, FTC v Burnlounge and Webster v Omnitrition, Herbalife is clearly a pyramid scheme.


In my first article I addressed the reason why Herbalife will not sue Bill Ackman, but in this article, I decided to ask another question to Herbalife stockholders, that is:
What will happen to Herbalife stock when the FTC refuses to allow Herbalife to continue to count failed distributors as customers?
Herbalife has recently informed us that a "contested complaint" may be filed against them, are they preparing shareholders for the inevitable lawsuit and/or injunction because they have reached an impasse with the FTC?.....

Excellent analysis of Herbalife and the issue of trying to label distributors as customers because in reality the vast majority of sales are to folks desperately trying to scrounge money out of the pyramid scheme pay plan.

Herbalife Finally Showing Signs Of Cracking - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Summary

In China, sales declined 11.7% between Q2 and Q3 - from $242.5M to $214.2M.
In the U.S., sales declined 9.6% from Q2 to Q3 - from $266.5M to $241M.
Herbalife provided full-year GAAP diluted EPS guidance for FY 2017 of $3.95-4.35.
Based on a 12x multiplier, this implies a fair value of $47.40-52.20 per share - a 12-20% decline from today’s closing price.


Also, I believe it's wiser to compare this quarter's numbers with the previous quarter's, rather than year-over-year numbers in the same period - mainly because of the FTC injunction and the fact that Herbalife is at a turning point, which means it makes less sense to compare YOY numbers than it does to compare successive quarters. Essentially, what I'm looking for are momentum and direction.

A lengthy expose that is definitely worth the read!

Herbalife: The Lay-Up - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Summary

The recent U-turn of the FTC is much more significant than you think.
Herbalife is much more vulnerable than they let on in their IR and PR.
Carl Icahn truly is hoist on his own petard and he missed the last exit.
The Rest of the World will not take forty years to find out they've been had.
The MLM/pyramid scheme scandal is ten times bigger than the Madoff affair...........





Conclusion
Herbalife is in denial, and their largest investor, Carl Icahn, is completely confused about their business model and thinks the company can make the change and thrive, or if that's not the case, at least he pretends and he plays bluff poker very well, but in all likelihood he has now missed last exit on his highway of doom. The posturing is immaterial. Dumb deals are done all the time, but it is hard to see who he could line up to partner with him in taking Herbalife private, given the atrocious prospects. By the third quarter of 2017 the transition will become fully reflected in the company's financials, but the facts on the ground indicate that the deterioration is setting in, and will be a steady erosion from hereon out. The slide is unstoppable at this point and it is time for Herbalife management as well as their lead investor, to follow the advice from M*A*S*H psychiatrist Maj. Sidney Freedman: "Ladies and gentlemen, take my advice, just pull down your pants and slide on the ice."

There are loads more excellent articles:

For All The Hype About Herbalife's Discount Buyers, We Estimate They Account For Less Than 2% Of U.S. Sales - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Summary

Herbalife has less than a year to show the FTC that the vast majority of its products are sold to people who have no interest in its business opportunity.
To do this Herbalife must prove that legions of people sign up with the company only to buy the product at a discount for personal consumption.
Herbalife’s disclosure regarding so-called Discount Buyers has been self-serving and misleading since the company came under scrutiny.
We estimate the number of current Discount Buyers, based on Herbalife’s disclosures, past and present, and the FTC’s findings, and discover that they account for less than 2% of Herbalife’s US sales.

Herbalife's Qualification Crowd Is In Trouble - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Summary

Herbalife has less than a year to prove to the FTC that its US business is based on sales to distributors with Retail Customers who purchase products at prices that generate real profits.
We consider the buying patterns of a small and highly influential group of Herbalife’s top distributors who account for an outsized share of the company’s sales.
We find standing qualification orders, phony accounts, collapsing pyramids of qualification buyers, millions of dollars of products donated to charity and thousands of dollars spent on storage space – all suggesting top distributors lack Retail Customers.
By the way, Herbalife would prefer if you didn’t call these top distributors to ask them about how their businesses operate.


Remember those Herbalife (NYSE:HLF) buttons? "Earn What You're Worth." It's time to find out what that really means.

A must read with lots of juicy quotes. Herbalife is outright lying to reps and investors!

Herbalife FAQ Ignores FTC And Regulatory Risk - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Summary

Herbalife released an FAQ aimed at distributors which directly opposes FTC findings.
They continue to push the idea that 73% of members are discount buyers, despite the FTC refuting this.
The FTC settlement is likely to have an adverse affect on Herbalife, which is obfuscated by their public statements.
Herbalife faces great regulatory risk from the settlement which may be underestimated by investors.


As everyone who followed the saga between Herbalife (NYSE:HLF) and the FTC will be fully aware, they eventually settled for a $200M fine and certain conditions to be applied to their business model. Despite these required changes to Herbalife's business, they recently released a FAQ document aimed at their distributors. This article will effectively take a look at a side by side of the FTC complaint against Herbalife, as well as the FAQ document they released post-complaint.
The misleading nature of this document is by no means a one-off. Senior management within the company have been consistently misdirecting their investors and distributors and this is just another example of the unacceptable way they blind their supporters from the harsh reality of their circumstance....

And, the winner is...... Amazon!

Shake-O-Nomics: Debunking The Myth Of The Herbalife Discount Only Member - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Summary

Herbalife claims that 86% of their members join primarily for the 25% discount.
Ackman claims the majority of these discount seeking members are in fact failed distributors.
In many cases it is cheaper to buy from Amazon than to become a Herbalife member with a 25% discount.
The Herbalife member churn rate of 90% means 5.2 million canisters of Formula 1 demand leave the GoHerbalife.com US market each year.
Despite 53% of US households having Amazon Prime the estimated Formula 1 sales on Amazon are a mere 89,000 canisters per year.

Originally Posted by Soapboxmom

A must read with lots of juicy quotes. Herbalife is outright lying to reps and investors!

Herbalife FAQ Ignores FTC And Regulatory Risk - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha


And, the winner is...... Amazon!

Shake-O-Nomics: Debunking The Myth Of The Herbalife Discount Only Member - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Ooh, now there's a surprise, an mlm lying to its reps!NOT!

Herbalife Is Starting To Fall Apart - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha

Summary

The recent annual disclosure shows sales declines across various regions.
China was previous responsible for nearly all of the sales growth.
Now, China is in decline.

New distributors recruit other distributors who then recruit other distributors. Each level of the endless chain makes a purchase. Sales increase sharply as more people are brought into the system. Then, as distributors fail to resell product or recruit enough people to make meaningful income, they quit. Most MLM companies see around half of their distributor base churn out each year. Herbalife is no different and that is exactly why China sales are beginning to drop.

China, the last bastion, is now in decline. The only way to stop the implosion of this scam is to go interplanetary.

Originally Posted by Soapboxmom

Herbalife Is Starting To Fall Apart - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha


China, the last bastion, is now in decline. The only way to stop the implosion of this scam is to go interplanetary.

Somehow, I don't think John Carter or the Martians will be interested...just a guess!

Betting on Zero is coming out soon.

Originally Posted by Soapboxmom

Herbalife Is Starting To Fall Apart - Herbalife Ltd. (NYSE:HLF) | Seeking Alpha


China, the last bastion, is now in decline. The only way to stop the implosion of this scam is to go interplanetary.

Or Herbalife upline will tell the masses they can lose double the amount of weight by drinking double the amount of weight loss shakes. That will double up sales.