Since may first when David Einhorn a famous Wall Street short seller asked elementary questions about the Herbalife’s reporting of sales volume. Specifically the separation of retail sales from sales made to consultants, it has caught the eye of other Wall Street short sellers who really don;t know anything about the direct sales business channel or the network marketing community.
This has been painfully obvious by the articles they have written and the “expert sources” they quote. To date, none of the well known watchdogs, advocates, attorneys or consultants have been contacted by these short sellers for any expert advice. You may ask how I know this to be true? None of the articles quote Len Clements, Rod Cook, Dr. Keith Laggos, Kevin Thompson, Kevin Grimes, Spenser Reese, Steve Richards, D. Jack Smith, Kevin Thompson, Jeff Babener, Gerry nehra, Rick Waak, Jerry Kelly, Joe MarianoCharles Orr, Garrett McGrath or Richard Brooke, Doris Wood. And in talking to several of these folks, none of them have heard from any of the short sellers or their organizations.
So what is it, that causes a person or organization to publicly call into question a whole industry without fully understanding the long term ramification of their actions… It is called “The Grey Area of Direct Selling aka Network Marketing!
This is not the first time Short Sellers have taken a swipe at Direct Selling companies. In 2007 we saw several of the same companies Herbalife and UNSANA hit with short selling by one of the biggest financial scammers and ponzi scheme experts in modern history Barry Minkow! Sadly, he claimed he had found “Jailhouse Religion” and was out to save the world. I am pretty sure this is why great financal experts like Neil Cavuto fell for his crap.
Here are a few of the article written about what happened.
Now you may be asking “What does this ponzi scam kind have to do with the current short selling issues facing Herbalife and UNSANA?” The same issues used by Minkow are what the short sellers today are bringing up. And it all has to do with a topic MLM Attorney Kevin Thompson has been talking about for the last few months… Customer sales, what are they, how many are there, and do the companies really enforce and keep track of them?
Thompson has written several articles on the subject shot the following video.
“I’ve long been writing about the importance for strong customer numbers. I’ve gone so far to write that we, as an industry, are deluding ourselves by pretending there’s not a problem. Throughout my career in the industry, I failed to appreciate arguably the most powerful lever that will eventually lead to positive change: the market. While most companies in the space are not publicly traded, the ones that are will be pressured to provide some strong customer metrics in order to build investor confidence. Investors are getting educated. Instead of re-hashing legal principles about the legitimacy of paying commissions on downline consumption, we need to be having a more serious conversation about ways to improve the space to improve confidence in the overall marketplace.” Read More… http://themlmattorney.com/herbalife-usana-and-big-shorts/
So many times we hear about folks on Wall Street who manipulate the financial markets in their favor. Well yesterday the network marketing community, especially Herbalife stockholders and distributors felt it first hand when David Einhorn asked some very amateur financial questions. However, since folks know he is very smart, they just figured he must know something they didn’t and dumped the Herbalife Stock. The good news… Today you can go buy the stock at a great price 🙂