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

5 Best States for Golf Adventures

Top 15 Places To Visit Before You Die

10 Most Expensive Smartphones in the World

10 States with Lowest Physician Density

10 Top Reasons For Getting Fired

The 3 Best States to Start an LLC

10 Jobs That Allow You to Travel

7 High-Paying Jobs You Can Do From Home

12 Best Cities to Shop in USA

10 Best States To Practice Medicine

The 10 Best States to Have a Business

The 12 Most Expensive Apple (AAPL) Apps in the Market

The 10 Richest Billionaires in the World

10 Biggest Kickstarter Failures

The 10 Best Places to Work At

The Top 10 of Google Inc (GOOGL)’s Most Expensive Acquisitions

13 Best Cities to Visit in South America

10 Most Expensive Works of Art of All Time

The 10 Richest Banks in the World

The 10 Best-Paying Jobs in America (2014)

7 Most Expensive Foods in the World

The World’s Top 10 Earning Authors

Five Wicked and Very Expensive Items (and Other “Stuff”) Sold on eBay

10 Biggest Celebrity Bankruptcies

The Top 10 Highest Paid CEOs in 2014

The 10 Most Expensive Real Estate Cities in America

10 Most Expensive States To Live In America

The 10 Best Airlines in the World

The 10 Best-Selling Cars in 2014

The 10 Best Industries to Invest In

The 10 Most Expensive States to Own a Car In

Top 10 Business Schools in US: 2014 Rankings

Top 20 Female Billionaires in 2014

6 Movies That You Should Watch to Better Understand The Cold War

Top 15 Best Paying Jobs for Women in 2014

Top 6 Things Rich People Do Differently Every Day

5 Retirement Mistakes To Avoid (and Einstein’s Famous Quote)

11 Smartest People in the World

6 Films About the Financial World You Need To Watch (While “The Wolf” is Not Around)

Warren Buffett and Billionaires Are Crazy About These 7 Stocks

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

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!