re: Is Ackman right about Herbalife?

quote:

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Its a straight up ponzi.

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It's not technically a Ponzi scheme, which takes money from current 'investors' to pay old 'investors'.

I'm not an expert, but do believe that the majority of sales are to distributors for the purpose of resale, but they are probably not usually resold. As people sign on new distributors, they received a commission on all sales of distributors under them, so it is a pyramid scheme/model.

None of this really matters to an investor UNLESS a government entity decides it's some type of fraud. The question isn't whether they are a pyramid or not (which they no doubt are), the question is whether the gubmint will decide they have committed some kind of fraud.

as I see it anyway