Hacker News new | ask | show | jobs
by jayalpha 2804 days ago
" It's as if you took Herbalife as a valuable/honest/model player in the dietary supplement market..."

Are they not? Shakes can be a decent way to lose weight. Seems to be that people are willing to pay a premium for the "community". But IMHO saying their stuff is overpriced is like saying beer in a bar is overpriced because you can buy a beer for one dollar in the supermarket. Yes, it is correct. In some way.
2 comments
atombender 2804 days ago
There's nothing wrong, at least conceptually, with Herbalife's products, protein shakes.

However, Herbalife's success comes from their incredibly shady and destructive pyramid scheme that preys on individuals and tricks them into acquiring debt in exchange for becoming "distributors" of Herbalife products. According to the FTC [1], "it's virtually impossible to make money selling Herbalife products".

I recommend the documentary Betting on Zero [2] for more insight into Herbalife, as well as the fascinating story of Bill Ackman's failed attempt at shorting their stock at a huge scale.

[1] https://www.ftc.gov/news-events/blogs/business-blog/2016/07/...

[2] https://en.wikipedia.org/wiki/Betting_on_Zero

link
hellogoodbyeeee 2804 days ago
Betting on Zero is a great documentary. If you want a competing view point, you should read the blog posts by John Hempton, an Australian hedge fund manager.

http://brontecapital.blogspot.com/2015/06/herbalife-very-lon...

link
blang 2804 days ago
Not the parent, but I imagine what they are talking about is the Herbalife depends more on recruiting new members than they are from selling product. I would link but just googling "bill ackman herbalife" will lead you down infinite rabbit holes.
link
jayalpha 2804 days ago
I know. A bet that did not turn out too well for Ackman, didn't it? As mentioned by someone here and in my RSS Feed:

http://brontecapital.blogspot.com/2015/06/herbalife-very-lon...

[I don't have any position in Herbalife and I enjoy my shakes Harbalife free]

link
nemo846 2803 days ago
Pyramid schemes strive until they run out of victims.

How much of Herbalife’s success is from selling a competitive product will determine its survival in the long run.

Still its MLM sales methods are questionable and cost a lot of people money.

link
jayalpha 2803 days ago
If it is a Pyramid scheme. Bronte capital doubts this and they give, as always, decent reasons.
link