Herbalife Ltd. (HLF) Hammered Again, Ackman’s Four Pillars of a ‘Pyramid Scheme’

They are as follows (via Barron’s): (1) questions Herbalife’s R&D practices, (2) mentioning that it “pays PhDs to lend them credibility,” (3) the assertion that around 90% of “compensation” is from “rewards,” calling that percentage evidence of a “pyramid scheme,” and (4) the evidence of “pop and drop” trends in various countries.

At the conclusion of his presentation, Ackman discusses Michael Johnson’s own insider transactions, adding that “[w]e welcome the SEC looking at our books.”

A quick look at the insider transactions of the Herbalife CEO show that he has performed no insider buys in the past year, while initiating a bevy of selling activity. Now, there are many reasons for insiders to sell a company, and it’s likely that this is profit-taking, but the records are publicly filed with the SEC. Take a look on our database for yourself, and check out some other coverage of Herbalife below:

Here’s What Herbalife’s CEO Had to Say About Ackman…It Wasn’t Pretty

David Einhorn Asked Herbalife Execs Some Interesting Questions in its Earnings Call