If Herbalife is found to be a pyramid scheme, what would happen to the stock price?
(Monkey, 45
Points)
on 12/29/12 at 4:00am
Would it be worth $0 immediately and be delisted, or would it stay at the same price and then be delisted.
Looking at some options strategies






According to Bill Ackman,
According to Bill Ackman, "Herbalife cannot survive in a middle-ground." Meaning, it is binary. It is either a pyramid scheme (which, as he states, is a zero), or it is a respectable, legitimate multi-level marketing company.
Hope this helps.
The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.
It doesn't fit the technical
It doesn't fit the technical definition of a pyramid scheme because it markets real products (a true pyramid scheme is built only on promises and is illegal).
Your question indicates that
Your question indicates that your general level of knowledge is such that you would be wise to hand over money management to somebody else.
All I care about in life is accumulating bananas
Their products are selling
Their products are selling pretty well in China...
inkybinky: It doesn't fit the
It doesn't fit the technical definition of a pyramid scheme because it markets real products (a true pyramid scheme is built only on promises and is illegal).
That is incorrect. Legally, a pyramid scheme is when a multilevel marketing company distributor makes MORE money RECRUITING than SELLING product. To your point about illegality, pyramid schemes are inherently fraudulent and the repercussions are severe.
Let's just see how it plays out. Will be interesting.
The difference between successful people and others is largely a habit - a controlled habit of doing every task better, faster and more efficiently.
mhurricane: inkybinky: It
It doesn't fit the technical definition of a pyramid scheme because it markets real products (a true pyramid scheme is built only on promises and is illegal).
That is incorrect. Legally, a pyramid scheme is when a multilevel marketing company distributor makes MORE money RECRUITING than SELLING product. To your point about illegality, pyramid schemes are inherently fraudulent and the repercussions are severe.
Let's just see how it plays out. Will be interesting.
Whenever I see someone defend HLF, I wonder if they themselves are a distributor, or even a cog in another MLM.
"There are three ways to make a living in this business: be first, be smarter, or cheat."
inkybinky is an idiot. I love
inkybinky is an idiot. I love how some people say wrong things with 100% confidence
notamonkey: Your question
Your question indicates that your general level of knowledge is such that you would be wise to hand over money management to somebody else.
Couldn't have said it better. If he's asking questions like these, he's way ahead of himself flirting with options
gammaovertheta: notamonkey:
Your question indicates that your general level of knowledge is such that you would be wise to hand over money management to somebody else.
Couldn't have said it better. If he's asking questions like these, he's way ahead of himself flirting with options
+1,000,000
Event-driven strategies of any kind tend to work best when the position is initiated BEFORE the whole world starts looking at it...or unless you have inisght supporting a contrarian view that nobody else has. But I'm guessing you don't.
I know it's been posted
I know it's been posted several times on WSO, but if you haven't seen this powerpoint presentation yet, it's worth a skim. Wow, as a takedown this is an absolute work of art.
http://factsaboutherbalife.com/wp-content/uploads/...
I just wanna see the CEO
I just wanna see the CEO freak out on CNBC (i think)
Remember, once you're inside you're on your own.
Oh, you mean I can't count on you?
No.
Good!
snakeplissken: I just wanna
I just wanna see the CEO freak out on CNBC (i think)
Get on the analyst call.. 10 Jan I believe.
"There are three ways to make a living in this business: be first, be smarter, or cheat."
mrb87: gammaovertheta: no
Your question indicates that your general level of knowledge is such that you would be wise to hand over money management to somebody else.
Couldn't have said it better. If he's asking questions like these, he's way ahead of himself flirting with options
+1,000,000
Event-driven strategies of any kind tend to work best when the position is initiated BEFORE the whole world starts looking at it...or unless you have inisght supporting a contrarian view that nobody else has. But I'm guessing you don't.
I think you guys are being a little harsh. Sure the question is a little naive, but if you listen to the webcast and the explanation, you'll realize that Ackman is gunning for HLF to hit $0. The only way this happens is if the FTC destroys this company. On the other hand, if you look at HLF without any opinion on whether you think HLF is a pyramid scheme, the company seems pretty profitable with strong cash flow relative to current valuation. ~$300mm in balance sheet cash and $500mm in operating cash flow can buy back a ton of shares. The short thesis is great, but I'm not sure everyone will buy it.
HarvardOrBust: mrb87: gam
Your question indicates that your general level of knowledge is such that you would be wise to hand over money management to somebody else.
Couldn't have said it better. If he's asking questions like these, he's way ahead of himself flirting with options
+1,000,000
Event-driven strategies of any kind tend to work best when the position is initiated BEFORE the whole world starts looking at it...or unless you have inisght supporting a contrarian view that nobody else has. But I'm guessing you don't.
I think you guys are being a little harsh. Sure the question is a little naive, but if you listen to the webcast and the explanation, you'll realize that Ackman is gunning for HLF to hit $0. The only way this happens is if the FTC destroys this company. On the other hand, if you look at HLF without any opinion on whether you think HLF is a pyramid scheme, the company seems pretty profitable with strong cash flow relative to current valuation. ~$300mm in balance sheet cash and $500mm in operating cash flow can buy back a ton of shares. The short thesis is great, but I'm not sure everyone will buy it.
Fair, but everyone in the world is looking at it right now, so not sure how this kid thinks he will get his edge.
Take a directional bet with
Take a directional bet with options.
1. You determine the probability of the stock hitting $0
2. You price your options and determine that the price < expected value of profit
Maybe you don't have an edge but it's fun speculation.
And I guarantee you that even if people are looking at it, I bet you people are trading HLF without even having seen the webcast.
My brother was involved with
http://kiddynamitesworld.com/
Ackman is screwing up
I notice that the older I am the more I sound like Illini Programer
- accountingbyday
UFOinsider: Ackman is
And yeah there are spelling
I notice that the older I am the more I sound like Illini Programer
- accountingbyday
mrb87: UFOinsider: Ackman
I notice that the older I am the more I sound like Illini Programer
- accountingbyday
If you think the stock is
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
UFOinsider: mrb87: UFOins
SirTradesaLot: Of course,
mrb87: SirTradesaLot: Of
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
SirTradesaLot: mrb87: Sir
mrb87: lots of risk... no
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
SirTradesaLot: mrb87: lots
mrb87: UFOinsider: mrb87:
All I care about in life is accumulating bananas
mrb87: Nothing you're writing
I notice that the older I am the more I sound like Illini Programer
- accountingbyday
UFOinsider: 1. ER, Corpfin,
All I care about in life is accumulating bananas
notamonkey: UFOinsider: 1.
I notice that the older I am the more I sound like Illini Programer
- accountingbyday
UFOinsider: Now I run several
All I care about in life is accumulating bananas
notamonkey: I had the
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
SirTradesaLot: notamonkey:
All I care about in life is accumulating bananas
notamonkey: Most people who
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
UFOinsider: mrb87: Nothing
notamonkey: SirTradesaLot:
"There are three ways to make a living in this business: be first, be smarter, or cheat."
Sandhurst: On another
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
Sandhurst: notamonkey: Si
mrb87: Sandhurst: On
"There are three ways to make a living in this business: be first, be smarter, or cheat."
Sandhurst: notamonkey: Si
All I care about in life is accumulating bananas
I'm with UFO on this one. My
" A recession is when other people lose their job, a depression is when you lose your job. "
The.RealDeal: I'm with UFO on
notamonkey: Sandhurst: I
"There are three ways to make a living in this business: be first, be smarter, or cheat."
Sandhurst: By, say, talking
I'm a lover, not a fighter, but I'm also a fighter, so don't get any ideas.
My WSO Blog
mrb87: Again, your comments
" A recession is when other people lose their job, a depression is when you lose your job. "
The.RealDeal: Either way,
Huh? I'm not defending
" A recession is when other people lose their job, a depression is when you lose your job. "
SirTradesaLot: Sandhurst: B
"There are three ways to make a living in this business: be first, be smarter, or cheat."