Taking on Herbalife

Monday, March 24, 2014

Alexandra Stevenson, reporter for The New York Times, discusses hedge fund billionaire Bill Ackman's quest to bring down the nutritional supplement company Herbalife, which he calls a pyramid scheme. Stevenson explains his questionable methods and how Latino advocacy groups got involved.


Alexandra Stevenson

Comments [23]

Reminded me of why I don't read NYT for business info except to see which cliff the herd will tumble off.

Mar. 25 2014 10:10 AM
Larry from Brooklyn

I don't know where to begin. Robert Kiyosaki, Warren Buffet, Donald Trump, Jeff Bezos, all endorse or own network marketing or multi-level marketing companies. Amway is approximately a 12 Billion dollar company with over a million distributors. The profession generates over $167 Billion dollars worldwide and produces more stay at home millionaires than any other profession. Most of us who get into this profession have a lottery mentality which is a guarantee for failure. Keep in mind that you are given the opportunity as an independent distributor (self-employed) to go out and market the product or service as you see fit. And the companies try to provide you with marketing materials and training so you will be successful. The real focus should be on Mr. Bill Ackman whose goal is to make a substantial amount of money for his clients so he can than get more investors to trust and invest in his company. Personally, I think it should be illegal for someone to purposefully do what he's doing. What's the difference between creating a scheme and insider trading, nothing. I'm not saying that pyramid schemes and bad mlm companies don't exist. They do. Naturally, we all know know who's really the bad guy here. Network marketing is just a vehicle to give the average guy the opportunity to make a supplemental or a substantial amount of money so he/she can dream again. What's wrong with that?

Mar. 25 2014 01:40 AM
JP from Manhattan

Why don't these "victims" return their product, and recoup all of what they lost to

I would think Herbalife's refund policy would make it impossible for someone to get stuck with unsaleable inventory through any fault of Herbalife.

Mar. 24 2014 06:27 PM
Rodney from NY

I was a little angry to hear that man talk about looking out for the (undocumented) latinos only.

- Chinese

Mar. 24 2014 04:50 PM

Ackman is right, Herbalife is not what it seems but it's not a ponzi scheme. It's a money laundering scheme. There used to be one of these Herbalife storefront operations in my neighborhood and it was packed with "undocumenteds" every day, all day. The Puerto Ricans in Massachusetts who complained to authorities after they lost money didn't "get it". PRs speak Spanish but they are American and so totally missed the real purpose of Herbalife! When that Herbalife spot opened near me I bought Herbalife stock and finally sold it a few months ago after I got tired of Ackman and Icahn playing ping-pong with it, still made a nice profit though, heh heh.

Mar. 24 2014 01:36 PM

My ex-husband got tied up in Quixtar when he was unemployed. It trashed our shaky finances with the product purchases and the high-cost seminars. But I think that someone betting on a company's demise and then actively working for that demise is morally repugnant. The losers, as usual. are the little guys who get sucked in and ruined. A plague on both Ackerman and Herbalife.

Mar. 24 2014 11:51 AM
I am curious from down to earth

What else (outside of Herbalife) has the billionaire done for the "public good"?

Mar. 24 2014 11:25 AM

I came into the middle of the piece so I don't know if you covered the "under the table income" attraction of direct marketing.

Mar. 24 2014 11:25 AM
Taher from Croton on Hudson

The issue here is where is the federal government enforcement agencies? Brian, ask the NY Times reporter where is the government?

Mar. 24 2014 11:25 AM

I hear no mention of Bill Ackman's animosity towards Herbal Life's largest shareholder Carl Icahn.

Mar. 24 2014 11:24 AM

wasn't amway sued and fined in the 70's for being a pyramid scam?

Mar. 24 2014 11:24 AM

most people want to be rich and pyramid schemes, err, i mean multi level marketing companies play on that. They download hard work for "making money while you sleep". none of these companies offer products everyone already buys. amway wants you to buy THEIR toilet paper, THEIR cleaning products. try selling unknown brands to people, telling them to pay to join a system and order products you dont already use on a website.

Mar. 24 2014 11:23 AM

pyramid schemes always want you to "go wide" and they urge you to start with your family, then friends, because IF YOU CARE FOR THEM WHY WOULDNT YOU SHOW THEM HOW TO MAKE MONEY?

Mar. 24 2014 11:21 AM
Mary Collins Treacy from New York

This guy is kidding himself - Amway is as big a scam as Herbalife, if not more so. Years ago, someone tried to recruit me. I told him no repeatedly and he would not take no for an answer. His methods of recruiting seemed like he was trying to get me into a cult. I ended up threatening a restraining order against him although it didn't get to that. The guy praising Amway has clearly been brainwashed by the company.

Mar. 24 2014 11:17 AM
keith from NYC

Look into ALPHAY!

Mar. 24 2014 11:15 AM

amway is a religious cult too besides being a pyramid scheme. their online website was called quixstar or something like that. you had to be your own customer. they urge you to start with family and friends. then they have urge you to go on these arena lectures on a bus, and they have religious overtones.

Mar. 24 2014 11:15 AM
oscar from ny

Sounds like my taxes

Mar. 24 2014 11:14 AM
Shawn from NJ

I don't understand the problem here. This is a typical situation where uneducated people are sold a bill of goods on a get-rich-quick scheme. Why do people think they can get something for nothing? Why aren't we going after the lottery, because that preys on uneducated people too?

Where is buyer beware?? Where is the "let's investigate this company before we invest" mentality? Anyone with a brain would not invest any money in Herbalife. Why are we protecting people who are just stupid with their money??

Mar. 24 2014 11:14 AM
BK from Hoboken

Can the guest speak to the people targeted by Herbalife to become distributors? From my experience it seems like many of the failed Herbalife distributors are for the immigrant community? It has been mentioned tangentially already but it seems that it is concentrated in the immigrant community.

Mar. 24 2014 11:12 AM
Coogan from NYC

Herbalife is a scam- total ponzi scheme. I've never seen one storefront nor met anyone who bought their product or said it was worthy. Online reviews such as Amazon, Yelp have already been exposed as sometimes fraudulent so it's very difficult to assess the publics authentic view on the company and products.

As they say caveat emptor- whether you purchase the stock or products. If something doesn't smell right, stay away.

Alternative abound and there's nothing special or unique about her Alice that can't be found/bought elsewhere. As a job it has to be the worst for return on effort and time and money invested.

Mar. 24 2014 11:12 AM
Dee from NJ

Sold Herbalife 30 years ago. I ended up with a lot of product, no sales. Definitely a pyramid scheme, almost cult like. I also sold Avon and made money. Herbalife preys on poor people

Mar. 24 2014 11:09 AM

Isn't Bill Ackman the same big-talking hedge fund billionaire that was going to save Stuyvesant Town tenants from the bankrupt landlord, until he got his investment bought out at a profit and left the tenants on their own?

Mar. 24 2014 11:07 AM
Alexis McCrossen from Dallas, TX

The real tragedy of Herbalife --unlike Amway or Tupperware -- is that it promises solutions to medical problems. So there are many victims of Herbalife who had life-threatening conditions caused by disease or accidents who were told they just had to use the product correctly and believe in its positive effects and they would recover. These victims are people who shy away from the health-care system due to undocumented status, lack of money or other fears.

Please look at the amazing ethnographic work by the sociologist Dr. Peter Cahn (published by Routledge Press).

Mar. 24 2014 11:07 AM

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