Is Herbalife Ltd. (HLF) Business Fair, Legal? Bloomberg TV’S Greeley Throws Light on Bill Ackman’s Comments

In its weekly programming segment, Business Week, Bloomberg TV’s Brendan Greeley shared with the viewers, a complete low down on global nutrition company Herbalife Ltd. (NYSE:HLF) which has been grabbing negative headlines on business magazines in the past few months, after billionaire investor and manager of Perihing Square Bill Ackman made caustic comments about the $4.8 billion market cap firm’s business model and made a billion dollar bet that the company would fail in the near future.

Herbalife Ltd. (NYSE:HLF)

Mr. Greeley explained to his viewers the major differentiating factors between Herbalife Ltd. (NYSE:HLF) and GNC Holdings Inc (NYSE:GNC) which are publicly traded companies and also sell similar nutrition products. The report goes on to spell out that

“Herbalife Ltd. sells nutritional supplements like Vitamins, shakes, things that make you skinny. GNC Holdings Inc (NYSE:GNC) is a company that does the same thing. But there is an important distinction, GNC sells through stores to people who want to buy vitamin shakes whereas Herbalife Ltd. (NYSE:HLF) sells to people through distributors, who then find their own customers”.

Mr. Greeley then went on to compare the quarterly revenue generated by the two companies to better illustrate the difference between Herbalife Ltd. (NYSE:HLF) and GNC Holdings Inc (NYSE:GNC) for viewers. He pointed out that GNC Holdings Inc (NYSE:GNC) revenue has a lot of variations which are determined by its customer buying patterns, where as the revenue of Herbalife Ltd. (NYSE:HLF) has much less variations since, the customers of the Cayman Islands head quartered firm are not people who want to lose weight, but are those people who want to start a business.

He then went on to answer his own questions whether Herbalife Ltd. (NYSE:HLF) business is fair and illegible by stating that the business is not fair, but is legal. He explains that, the customers/distributors of Herbalife are forced to take on risks associated to setting up store fronts, marketing, holding inventory.

Further the report goes on to speculate that the business is probably legal, even though law enforcement agencies have recorded in recent times complaints about the company overstating the upside of the business to its distributors and then refusing to buyback unsold inventory from them.

The report finally concludes that the reason why the company is attracting headlines over the past 18 months is due to the fact that self made billionaire Bill Ackman is short on Herbalife Ltd. (NYSE:HLF) and has gone public with his opinion that the business model resembles a pyramid scheme.

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!