[NGR] Ackman's presentation on Herbalife: “This isn’t even a pyramid scheme, it’s a pancake scheme.”

Discussion in 'Los Angeles Galaxy' started by CapeCodFutbol, Dec 20, 2012.

  1. CapeCodFutbol

    CapeCodFutbol Member

    Joined:
    Nov 20, 2009
    Club:
    FC Barcelona
    Country:
    United States


  2. dashiel

    dashiel Member+

    Joined:
    Jul 15, 2000
    Location:
    orange county
    Pot meet Kettle.
    Hachiko repped this.
  3. Beakmon FC

    Beakmon FC Member

    Joined:
    Jan 10, 2002
    Location:
    The OC
    Club:
    Los Angeles Galaxy
    Country:
    United States
  4. klpv82

    klpv82 Member+

    Joined:
    Mar 8, 2011
    Club:
    Los Angeles Galaxy
    Country:
    United States
    Stock got killed these past couple of days. From around $42 to $34 now.
    Ackman even said that Herbalife might be the ones buying shares to keep the stock barely afloat.


  5. profiled

    profiled Moderator Staff Member

    Joined:
    Feb 7, 2000
    Location:
    Nirvana
    Club:
    Los Angeles Galaxy
    Country:
    United States
    Can't say I'd be sad to see a new less shady sponsor jump on board should Herbalife implode.
  6. Galaxy Steve

    Galaxy Steve Member

    Joined:
    Jun 15, 2007
    Location:
    PASADENA AREA
    FULL DISCLOSURE:
    I am not an owner of Herbalife stocks or options, I am not an employee of Herbalife, I am not even an Herbalife customer. I am however, the person who introduced Herbalife to the LA Galaxy and to AEG and am responsible for turning Herbalife's interest in a soccer sponsorship (in something other than MLS) into a partnership with AEG and the LA Galaxy and I do think it is fair to offer you Herbalife's response.
    -Steve





    [​IMG]

    Herbalife Statement in Response to Ackman Presentation

    LOS ANGELES--(BUSINESS WIRE)-- The following is a statement from Herbalife in response to the Ackman presentation. Today's presentation was a malicious attack on Herbalife's business model based largely on outdated, distorted and inaccurate information. Herbalife operates with the highest ethical and quality standards, and our management and our board are constantly reviewing our business practices and products. Herbalife also hires independent, outside experts to ensure our operations are in full compliance with laws and regulations. Herbalife is not an illegal pyramid scheme.
    About Herbalife Ltd.
    Herbalife Ltd. (NYSE:HLF) is a global nutrition company that sells weight-management, nutrition, and personal care products intended to support a healthy lifestyle. Herbalife products are sold in more than 80 countries to and through a network of independent distributors. The company supports the Herbalife Family Foundation and its Casa Herbalife program to help bring good nutrition to children. Herbalife's website contains information about Herbalife, including financial and other information for investors at http://ir.Herbalife.com. The company encourages investors to visit its website from time to time, as information is updated and new information is posted.
    [​IMG]
    Herbalife Ltd.
    Media Contact:
    Barbara Henderson
    SVP, Worldwide Corp. Comm.
    213-745-0517
    or
    Investor Contact:
    Amy Greene
    VP, Investor Relations
    213-745-0504
    Source: Herbalife Ltd.
  7. Hachiko

    Hachiko The Akita on Big Soccer

    Joined:
    Jun 8, 2005
    Location:
    Long Beach, CA
    Club:
    Los Angeles Galaxy
    Country:
    United States
    Mmmmmm...pancakes...

    [​IMG]
    propeller74 repped this.
  8. Jazzy Altidore

    Jazzy Altidore Member

    Joined:
    Sep 2, 2009
    Club:
    --other--
    *guy who equates investing in businesses with stealing from investors*
  9. scsc2000

    scsc2000 Member

    Joined:
    Jul 7, 2008
    Herbalife is nothing more than a pyramid scheme. I was tricked into it back in my early 20s. Their business model is a pyramid, their meetings resemble that of a religous healing conference. However, the same model is being used with AEG which we all know, sponsors Manchester United.
  10. The Cadaver

    The Cadaver It's very quiet here.

    Joined:
    Oct 24, 2000
    Location:
    La Cañada, CA
    Club:
    Los Angeles Galaxy
    Country:
    United States
    Say what??
  11. Galaxy Steve

    Galaxy Steve Member

    Joined:
    Jun 15, 2007
    Location:
    PASADENA AREA
    You mean AIG...
    Right?

  12. Benny Dargle

    Benny Dargle Member+

    Joined:
    Jul 23, 2008
    Location:
    LA
    Was there actually a new uniform/club sponsor deal signed? I know they were working on it, but I don't recall whether it was finalized. If so, was there an out clause for this kind of thing (e.g., legal trouble or financial disruption)? You've got to believe there would be, which would really minimize AEG and the Galaxy's exposure. It just makes the financial valuation of the team more dicey for purposes of a potential sale if the uniform sponsorship deal has to be discounted for this kind of risk.
  13. reFnCoach

    reFnCoach Member

    Joined:
    Sep 18, 2003
    Location:
    SoCal
    So this guys shorts the stock, and THEN publishes all of this? That's as big of a scam as the MLM stuff is...
    profiled repped this.
  14. Chupacabra

    Chupacabra Member+

    Joined:
    Aug 2, 2004
    Location:
    Westwood, NJ
    AIG stopped sponsoring Man U in May 2010. AON is their principal/shirt sponsor now. Mister Potato also sponsors Man U. It's a potato chip scheme (or crisps as they say in the UK).
    Jazzy Altidore repped this.
  15. skydog

    skydog Member+

    Joined:
    Aug 1, 1999
    Location:
    Durham, NC
    Club:
    Los Angeles Galaxy
    The guy is donating all profits from the shorting to charity.
  16. Kerry Dixon's Boots

    Kerry Dixon's Boots Member+

    Joined:
    Jun 6, 2006
    Location:
    77 degrees
    Club:
    Chelsea FC
    Country:
    England
  17. Baysider

    Baysider Member

    Joined:
    Jul 16, 2004
    Location:
    Santa Monica
    Club:
    Los Angeles Galaxy
    So I read through the whole presentation (the things I do for the Galaxy).

    The sad thing is how inured we've become to this. It's hard to watch late-night TV or go on the internet without seeing "get rich" schemes that are just cynical ways of taking advantage of the poor and uneducated. And this stuff survives because the people who get the short end of the deal aren't sophisticated enough to do something about it (which is why they get sucked in in the first place). And from society's point of view, somebody losing $1,000 or $2,000 just doesn't generate attention in the way a Madoff does.

    My work is in a finance-related area which can make you cynical pretty fast, so I never really thought much about the sponsorship. But when you do think about it, what the Galaxy is doing is giving a veneer of respectability to Herbalife and that's not something we should be proud of.
    mbar repped this.
  18. Kerry Dixon's Boots

    Kerry Dixon's Boots Member+

    Joined:
    Jun 6, 2006
    Location:
    77 degrees
    Club:
    Chelsea FC
    Country:
    England
    Agreed on all counts.

    I read through a good chunk of it and whilst it's fairly easy to cherry pick a few statistics to make almost anything look bad, they really raise some fundamental points about the business model. I work in international business and have NEVER heard of Herbalife outside of their relationship with the Galaxy does raise the eyebrow a touch. Not to say I know every company and their model, but I fancy I have a fairly good handle on things

    I wouldn't be surprised if the Galaxy marketing team aren't scrambling right now and it also wouldn't surprise me if there aren't a number of strong companies lined up to provide sponsorship. When these things collapse, they do so rapidly.

    On the flip side to the Ackman charges, the SEC investigated the pyramid scheme angle in 2008 and again in 2012 with no charges bought, per this article and other sources.

    http://seekingalpha.com/article/107...alife-arguments-against-ackman-s-short-thesis

    It should also be noted that Ackman was a staunch defender of J. Ezra Merkin who was heaviliy implicated in the Madoff scheme so it may be wise to take his personal judgement with a pinch of salt.


    In other news I got a holiday card from the Galaxy today, which was nice.
  19. scsc2000

    scsc2000 Member

    Joined:
    Jul 7, 2008
    I apologize, I had AIG and AON mixed together. I do mean AON.
  20. The Cadaver

    The Cadaver It's very quiet here.

    Joined:
    Oct 24, 2000
    Location:
    La Cañada, CA
    Club:
    Los Angeles Galaxy
    Country:
    United States
    AON is hardly a pyramid scheme. Ii is a licensed and regulated insurance brokerage firm.
  21. mbar

    mbar Member+

    Joined:
    Apr 30, 1999
    Location:
    Los Angeles, CA
    Club:
    Los Angeles Galaxy
    Country:
    United States
  22. scsc2000

    scsc2000 Member

    Joined:
    Jul 7, 2008
    Been doing insurance for 12 years, check them out. IMO, pyramids are a business model, its not a scheme, it's only a scheme if you're dumb enough to get tricked into it as I have many years back. Obviosly, big companies like AON are not going to put their name, but most subsidiaries will lead to them. Try posting a resume on any job search websites, you will get an email telling you that you have an oportunity to be your own boss, obviously it's not going to be AON that contacts you, but do research further into the company that contacts you, it will lead to them.
  23. Kerry Dixon's Boots

    Kerry Dixon's Boots Member+

    Joined:
    Jun 6, 2006
    Location:
    77 degrees
    Club:
    Chelsea FC
    Country:
    England
    Pyramid schemes are based on selling their own products to individuals whereas Aon provide services primarily to organizations. Any 'products' that are purchased using their services are typically insurance contracts provided by licensed insurance companies.

    Aon are a highly reputable and extremely sophisticated company and about as far from a shady pyramid scheme as you can get.

    Being your own boss in that industry is about managing your own portfolio of clients not managing a team who manages a team who manages a team and so forth. Commissions earned by Aon employees are then used to provide services and do not go into the pocket of the broker (who will be reimbursed primarily through salary and bonus, again the direct opposite of a pyramid where income is earned based on weight of sales alone).

    My two cents, I'd be interested in how Aon is doing what Herbalife is accused of doing (which for the record will be fairly quiet until the week of Jan 7).
  24. scsc2000

    scsc2000 Member

    Joined:
    Jul 7, 2008
    Are we sure about this?
  25. Kerry Dixon's Boots

    Kerry Dixon's Boots Member+

    Joined:
    Jun 6, 2006
    Location:
    77 degrees
    Club:
    Chelsea FC
    Country:
    England
    If you work for a tied agency, then your income is based on commissions (similar I would suggest to high street brokers who are looking to place contracts with individuals but have no products of their own) but my understanding of how Aon do business (they are a competitor of mine in their consulting arm) is that they provide services to corporations and commissions are paid back to Aon directly.

    I just don't get the analogy to Herbalife at all.


    EDIT: Even if commissions were paid across directly, I still don't see how it is a pyramid structure unless you're saying that as you get more senior the employee in the hierarchy, the fewer people there are in which case every business is pretty much a pyramid.

Share This Page