Has Bill Ackman Delivered the Deathblow to Herbalife?

"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.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 25, 2014, at 1:00 PM, plange01 wrote:

    herbalife deals a deathblow to packman and the fools who invested in his TRASH FUND

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3041789, ~/Articles/ArticleHandler.aspx, 9/30/2014 6:40:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement