Has Bill Ackman Delivered the Deathblow to Herbalife?

In yet another lengthy presentation, hedge fund manager Bill Ackman targets Herbalife's nutrition clubs.

Jul 24, 2014 at 5:34PM

"Maybe I didn't do a good job," Bill Ackman said, toward the end of his more than three-hour-long Herbalife (NYSE:HLF) presentation on Tuesday. With Herbalife shares surging more than 25% during the session, even as the founder of hedge fund Pershing Square attempted to deliver the "deathblow" to the multilevel marketer, his self-assessment appeared accurate.

Perhaps it was his aggressive promotional push, Wall Street traders' short attention spans, or the drawn-out nature of his presentation, but Herbalife shares shrugged off Ackman's attacks.

Yet there was significant substance to Ackman's presentation. This time, Ackman took aim at Herbalife's Nutrition Clubs -- quasi-distribution centers that have accounted for much of the company's growth in recent years, and generate much of its revenue. While Ackman, and his fund Pershing Square, insist that Herbalife as a whole is a pyramid scheme, they believe that Herbalife Nutrition Clubs operate as mini pyramids within it -- a pyramid scheme propping up a larger pyramid scheme.

While interested investors should probably take the time to watch Ackman's presentation in full, the following slide show summarizes his major points.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Herbalife: Pyramid in a Pyramid from The Motley Fool.

Sam Mattera is short shares of Herbalife. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and has the following options: long January 2016 $57 calls on Herbalife. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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