Friday / August 12. 2022
menu-logo menu-logo
brand-logo
Subscribe
Subscribe
Friday / August 12. 2022
  • Read
    • Daily News
      • Financial
      • Insights
      • U.S.
      • International
    • Cover Stories
    • Feature Articles
    • Company Spotlights
    • Exclusive Interviews
    • Executive Announcements
    • Forward Thinking
    • For You | For Your Field
    • Working Smart
    • New Perspectives
    • From the Publisher
    • Digital Issue
  • Listen & Watch
    • Direct Approach
    • Iconic Insights
    • The DSN Podcast
  • Attend
    • Direct Selling University
    • Global Celebration
  • Achieve
    • Global 100 List
    • CCR Program
    • Best Places to Work
    • Bravo Awards
    • Legends
  • Join
    • Membership
    • VIP Community
  • Research
    • Digital Momentum Index
    • Stock Watch
    • Stock Ticker
    • Supplier Directory
    • Resources
  • About
    • About DSN
    • Subscribe
    • Advertise
    • Store
    • Connect
  • Search
Subscribe

Herbalife Ducks Ackman’s ‘Death Blow’ as Shares Skyrocket

BY DSN Staff | July 23, 2014 | read / Daily News

Herbalife short seller Bill Ackman took to a Manhattan stage for nearly four hours Tuesday morning in his latest round against the global nutrition company. In a Monday interview with CNBC, Ackman claimed he would deliver Herbalife a “death blow” in the planned presentation, but it has had the opposite effect on the company’s stock. With one of its largest daily percentage increases thus far, the direct seller closed out the day at $67.77, up 25 percent.

“Once again, Bill Ackman has over-promised and under-delivered on his $1 billion bet against our company,” Herbalife said Tuesday afternoon in its response to Ackman. “After spending $50 million, two years and tens of thousands of man-hours, Bill Ackman further demonstrated today that the facts are on our side.”
 
The focus of Ackman’s presentation was Herbalife’s nutrition clubs, run by teams of distributors who rent commercial or industrial space to train and recruit others in a social environment. Ackman described the structured recruiting model as a “mini pyramid scheme” used by the company to target the “poorest of the poor” globally, and particularly U.S. Latinos.

At one point Ackman fought back tears recounting his own family’s American experience, which began when his grandfather emigrated from Germany. He claims Herbalife is “selling the American dream” by promising its salespeople success many will never achieve.

“Mr. Ackman’s claim about the earnings of Herbalife nutrition clubs is completely false and fabricated,” Herbalife included in its response. “In fact, according to a recent study commission by the company, 87.5 percent of nutrition club operators feel good about the money they earn, and 92 percent want to continue with their club.”

Ackman also took shots at Herbalife supporters and endorsers, including former Secretary of State Madeleine Albright and soccer stars David Beckham and Lionel Messi, saying they failed to perform due diligence on the company and are cashing in on a fraud. Albright’s connections likely enabled Herbalife to enter difficult markets like China, Ackman claimed.

Explaining how Herbalife has built a thriving multibillion-dollar business over more than 30 years, Ackman invoked the deception of totalitarian regimes, the Nazis and the mafia. “People generally believe big lies, because they’re so bold that how could they possibly be false?” said Ackman.

The Securities and Exchange Commission (SEC) launched a formal investigation of Herbalife in January 2013, but thus far has not made any charges against the company. “I think that’s a failure on the part of the SEC, even though they are hard-working, high-quality people,” Ackman noted.

The Federal Trade Commission (FTC) also opened an investigation into Herbalife in March of this year. In April, the Department of Justice, the FBI, and Attorneys General in New York and Illinois launched their own investigations into the company.

Today Herbalife also released the findings of an economic analysis performed by former FTC economist Dr. Walter Vandaele of Navigant Economics, LLC. Herbalife commissioned Vandaele to assess the company’s standing as a legitimate multi-level marketing (MLM) firm.
 
The assessment included factors such as end-use consumption of the product, as well as its intrinsic value and market demand. In summary, Vandaele found that “Herbalife’s U.S. business operations are consistent with the socially beneficial MLM model and inconsistent with the socially harmful pyramid scheme model.”

Posted in Daily News
Related Articles
Juice Plus+ Rebrands Image to Attract Younger Audience  August 12, 2022

Juice Plus+ Rebrands Image to Attract Younger Audience 

Read more
LR Group Sees 14.2% Drop in Sales During First Half of 2022  August 12, 2022

LR Group Sees 14.2% Drop in Sales During First Half of 2022 

Read more
dōTERRA Signs Five-Year Partnership with Utah Tech University Athletics   August 12, 2022

dōTERRA Signs Five-Year Partnership with Utah Tech University Athletics  

Read more
brand-logo
The News You Need.
The Name You Trust.
Subscribe

Breaking global news, emerging trends and powerful stories conveniently curated to help direct selling executives stay informed, engaged and a step ahead.

  • Read
  • Listen & Watch
  • Attend
  • Achieve
  • Research
  • About
  • Connect
5800 Democracy Drive
Suite 100
Plano, Texas 75024
info@directsellingnews.com
Copyright 2022 Direct Selling News | All Rights Reserved
  • Privacy Policy
  • Terms of Use
  • Advertise
  • Subscribe
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
Cookie SettingsAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT