Herbalife Distributors Continue to Win Despite War on Wall Street

Hi, everyone. Kevin thompson here, the mlm attorney. Also co founder of thompson, burton. And it's been a long time since I've done a video, Especially about the network marketing space. So it's such a pleasure for me to do this. I feel inspired. Right. There's some really good news happening out there. Herbalife winning, and I'm relieved. And, you know, there's an unsung hero out there. So when you turn on the news, especially cnbc, you see talks about the financiers on both sides of this stock. And you hear a lot about bill ackman. And for those of you unfamiliar with the situation, Bill ackman put a billion dollars of his hedge fund shorting herbalife. Essentially betting that the company would tank. And he accused them of being an illegal pyramid scheme. On the one side, you got that. On the other side, you have people that have taken long positions. Most notably carl icahn. Very famous investor, Taking a very long position. And he's very much vocally opposed. Adverse doesn't like bill ackman. So that's created a unique optic Wall street. And, of course, dan loeb also took a position. I think he's cashed out. He's a very notable investor. George soros has recently taken a very long position. So things are looking good. And the stock is back up. It was as low as, I think, the high 20s, maybe mid-20s. When Ackman came out and accused herbalife of being a pyramid. He said that this was the. The surest bet that he's ever made. He's never been more confident in any one of his decisions in his career. I mean, he was. He was very sure of himself. Also got to give love to robert chapman. He was the first person, the first wall street guy. To take a long position on herbalife. He was the first guy to said, look, timeout. Let's not lose our heads here. Herbalife is a great company, great numbers, great model. And he actually wrote a piece that we put on our blog. He and I collaborated a little bit. He's a fantastic guy, really good relationship. That I got out of this whole experience. Real quick, speaking of bob chapman, that article that I referenced, and I'll put a link to it below. I really think that moved the market. I think that moved the market in herbalife's favor. Back in the day when they didn't have any supporters. So can't ignore bob chapman. So anyway, you got all these personalities. On both sides of the stock. And you have the analysts that are just loving the attention that this is drumming up. I think it's good for ratings. Because we all want to see a train wreck. It's the reason why maybe we watch nascar races. We want to see the crash. We know, everybody knows that somebody is going to lose a lot of money on this deal. Betting on this stock. Whether you're long or bill ackman, who's short. Somebody is going to lose big. So that makes it interesting. Somebody's also going to win big, and they are winning big. I think bill ackman so far has lost close to 200, maybe $300 million. On his short position. That's tremendous. On the opposite side of the spectrum, Carl icahn has made over 200 million. Dan Loeb has made, I think, 100 million, but I'm not quite sure. So there's a lot of people making money on this thing. But here's my point. Three minutes into the video, here's the point. 3, 45. Nobody's talking about the distributors, right? Nobody is giving them the respect that they deserve. The reality is, there is no network marketing industry. I don't have a job as an mlm lawyer. Herbalife doesn't have a business. Carl icahn ain't making any money. If distributors aren't performing right. If they're not buying into the vision. Communicating the value of the product and selling product. And despite all of the controversy, the herbalife distributors, they saved the day. Right now, the matter isn't over. Okay? Can the ftc do something? Absolutely. Will they? It's unlikely. Herbalife, they've got a lot of things going for it. And as a result of ackman's short position. They're doing a lot of things to improve their model. Are they perfect? No. Are they an illegal pyramid scheme? Absolutely not. Should everybody that participates in the herbalife business turn a profit? Well, you would hope so, but that's just not reality. The reality is, with the low cost of entry, A lot of people join, and they don't do anything. And a lot of people join. They do a little bit, and then they quit. And they're in the loser column, right? That's the net loser that bill ackman is trying to protect. The model is not perfect, but it's the best thing that's out there. Kudos to the herbalife distributor. Number one. It's hard enough to build any kind of a business, period. And as a business owner, it's hard, right? We're actively building Thompson, burton. It's very hard to build a network marketing business. Where you're trying to sell products through different means, through different channels, through relationships, right? In america, we're not really raised and brought up to sell. Right through formal education, where it's sort of beaten out of us. Where we're given a problem, there's one right answer. We're not really taught the art of selling. And so it's a foreign concept for people. And that by itself, is hard. You throw in all this controversy. That herbalife is having to endure all of this public scrutiny. And for them to still produce, them being the distributors, the herbalife distributors, for them to produce, it's remarkable. Absolutely remarkable. The reality is that a lot of critics of the network marketing model, they took this as an opportunity to voice their criticisms, to say, look, this validates what we've been saying. Bill ackman is our champion. And critics from all over the place, They've literally produced zero literature. They've done nothing in 10 years. Maybe they wrote an article back in 2004. Now they're showing up, and they have all these opinions about the model. And herbalife, through the success of its distributors, Continues to climb. Continues to invalidate the naysayers. Because here's the thing, It's a little counterintuitive. When bill ackman says, well, it's an illegal pyramid scheme Destined to collapse, Resulting in losses to a significant number of investors. That's his argument. Well, if it's destined to collapse, and if it's so volatile, he's actively trying to kick it down, right? Spending resources, spending time to lobby people in congress, to lobby state legislators to take action. I don't know. I'm grateful for the herbalife reps. I'm really impressed. I think the future is tremendously bright for you guys and girls. So I want to say thank you. I really do. So what does this mean for the future? As long as ackman maintains his short position, there's going to be a national conversation. About network marketing in general. Again, as long as he maintains that short position, One would assume at some point, he covers, cashes out, takes his losses, and he moves on to something else. When he moves on, which, by the way, as herbalife distributors continue to perform, which I think right now, today, the Stock is at $65 per share. At its lowest point, it was down to the mid twenties. As the stock continues to perform, his losses increase. The likelihood of him exiting, go up. But when he leaves, that's not the end of it. So he has pointed out a few issues about the model. It's gotten some attention. He has started some conversations. Here's my personal opinion. And actually, I went on cnbc to talk about this. And herb greenberg and I, we talked about a lot of things. And I got 10 seconds in the program. Still very appreciative of the experience. But this is what I was called on to talk about. The reality is, there is a lot of gray in the industry. There is. It's just reality. When I first started my practice, when it was the law office of me, several years ago, the first thing that I did was I wrote a very long ebook about the importance of defining the gray. It was titled Saving the network marketing industry by defining the gray. Took me a while to think about it. I haven't seen Seen that in a while. And when there's a lot of legal ambiguity, it allows scams to masquerade as legitimate network marketing programs. Think zeek rewards. They paid all the right people, did all the right things, Said the right things. They said, look, we have a valuable product that people want. All the commissions are based on customer sales, Blah, blah, blah. It wasn't hard for them to look good. And so I've been a proponent of clarifying, Adding clarity to the gray. I think that's going to happen. That's not going to hurt herbalife. And if it does happen, it's going to be the result of serious discussions. Between the ftc and whoever they choose to be part of those discussions. And guidelines will be passed. Maybe again, this is me just projecting into the future. I think the ftc will get involved. I don't think they're going to screw up the space, so to speak. At least I hope not. And I think the industry will improve. And as the industry improves, Trust in the marketplace will improve, which means business should be good. I'm an optimist. At the same time, I'm a realist. I do think we're on that sort of a track. There is going to be a cleanse in the future, short term, for herbalife. Company's doing just fine. It's winning because the distributors are winning. And as long as that continues to happen, we're going to be in good shape. So that's the deal. It's been a while. Love you guys. Take care.