This blog post is an analysis on the economic podcast “A Billion-Dollar Bet Against Weight Loss Shakes.” This podcast appeared on the planet money website on January 18, 2013. The podcast involves a billion dollar company named Herbalife and complications that are arising around them. Bill Ackman a hedge fund manager has went against this company and has made his voice heard that he believes this company is a pyramid scheme. He is so confident and wants it to be right, that he has shorted the Herbalife stock which is traded on the New York Stock Exchange "ONE BILLION DOLLARS".
On this I stand behind Ackman. I also believe the company is a fraud and a pyramid scheme like many others like the make-up door to door companies and similar to Cutco knife sales. Though he has such a strong feeling a billion dollar wager in shorting a stock of a company that has been successful for 30 years is risky. WIth saying that i have never even heard of the products this company sells. Being a four billion dollar company with no advertisement and research and development money being spent, something has to be up.
After Ackman came out and said that Herbalife is a pyramid scheme in a 300 slide powerpoint on the company the companies stock dropped 14.6 points. This also is what Ackman wants. Shortening the stock he will make money every time it drops and hopes that it will fall to zero. On his part it could be smart that he went to the public and was so outspoken because it will shake the people and the stock up. Who knows where these products are being sold after the venders let other people sell it or who it is going to. The company obviously doesn't care about being a healthy company, but making money being a pyramid scheme.
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