Herbalife International is a  global international company that sells weight loss and skin care products. In the podcast it was explained that Bill Ackman was saying that Herbalife was a pyramid scheme which is considered a pyramid if participants obtain their monetary benefits primarily form recruitment rather than the sale of goods and services to consumers. Bill Ackman placed a 1 million dollar bet against Herbalife saying "Herbalife is a verbal scheme". After Bill made that comment Herbalife plunged 20%.

The reason why I believe that Herbalife is a scheme is because of the points that were made in the podcast that made sense. Herbalife is a big company but I have never heard of any brands by them. Formula 1 is something that is sold by Herbalife but has never been heard up and does the same thing as slim fast but slim fast is a popular brand name. Also, the numbers look odd. The company spends nothing on advertising and they don't sell there product in stores they are sold exclusively out of homes of people. 

Maryanne is in charge of Will Frado who is a independent distributor for Herbalife, so every time Will sells something for the company he has to go threw Maryanne who then gets part of the money of the sale. Basically the way people make the money is by recruiting sales people because then everyone works off everyone for the sale. Avon is a multilevel marketing company for example. What is illegal in this process is if people are selling Herbalife to people who don't actually want to drink the product. so those people who are buying the product but don't actually use is are just buying it to become a distributor to make the money.

Bill Ackman said that he spent well over a million dollars to put Herbalife into shortage. Bill Ackman is the man who said that Herbalife was a pyramid scheme. Either you can short the stock or you can buy the stock and how great it is.


 If Ackman is right the Herbalife company that reports roughly $4 billion in annual sales and a network of 3.2 million salespeople in 87 countries, could be shut down by the Federal Trade Commission.




 For years Herbalife has been referred to as nothing but a pyramid scheme. Because of the pyramid scheme the scandal involving Herbalife products and the number of people being ripped off by Herbalife ment that the company built up the worst reputations of all the multi-level marketing companies. So many people have failed to make money as a Herbalife distributor that most people refuse to get involved, let alone purchase Herbalife products.