I read through the slides back when this was presented. The issue that the guy (i.e. Bill Ackman) had is that the product is just a token, in his opinion: that

I read through the slides back when this was presented. The issue that the guy (i.e. Bill Ackman) had is that the product is just a token, in his opinion: that nobody opens it, it sits unopened in apartments and houses: it's just a way to implement a pyramid scheme in the very literal sense of the word. This is how a pyramid scheme works: "you give me $5 and you get in on it and get all the materials. Everyone you recruit gives me $5, since I'm the one operating this thing, but look! You get $1 of it. So if you get a thousand people to give me $5 for the materials, you've just made $1000 without doing anything. But it gets better: for every person THEY recruit (second level) you get $0.25. That's the real way for you to get to get them to agree to pay me. That's the real selling point. So let's say you get a thousand people to buy my materials - okay, you've made $1,000 nice - but you also remember this pitch I just gave you, you tell it to them, and they also start to see your success and follow in your footsteps. So they also get a thousand people just like you did. And this time it's passive income. That's now a million people at the second level giving me $5, and I give you $0.25 out of all of them. That's $250,000 and you didn't have to do anything except sell $5,000 of product. Do you know a thousand people? Do you think you can talk to a thousand people in the next few months? Easy. But it gets better. I'll even give you $0.20 of the third level. So let's say each of those million people on average recruit a thousand people, now we've reached 1 billion people. At this point, you now have one billion * 0.20 is $200 million dollars. And literally all you need to do is buy $5 of product from me right now, I'll hook you up with all of the materials. Try it. This shit WORKS. I'm pulling $20,000 a month already, and I just started literally 7 weeks ago. IT REALLY REALLY WORKS. Investigate for yourself." And what do you do if you investigate for yourself? You DO find that it really does fucking work! That's the whole thing about pyramid schemes, they really and truly well and truly work all the way until the minute they don't. Because, you know, there's only 7 billion people on the planet. So that's what the charge is, that's what the slides are about: http://www.slideshare.net/talzanco/bill-ackmans-herbalife-presentation http://www.slideshare.net/talzanco/bill-ackmans-herbalife-pr... That's the charge. That you don't even need the boxes of supplement, they're just a cover for the fact that this is a pyramid scheme. Consider them tokens instead of boxes of unopened herbalife: I sell you a token, but what I'm really selling you is the story of how much money I'm making selling tokens. You buy some tokens from me, and start trying to also sell tokens to your friends. And so forth. The product is incidental. (According to the charge.) There's no reason the product can't work extremely well. In fact, personally I would say Herbalife has all the incentive and probably means to make it the best nutritional supplement on the planet. If you're selling overpriced tokens, why not make them high-quality? But the charge is that the fundamental business model is a pyramid scheme, instead of a product-selling scheme. That people aren't buying the product, they're buying the business opportunity. This is easy to see. Read my spiel above. It's unlikely you would consider buying any product from me based on this comment for $5. But I bet at least some readers were like, "hmmm, logicallee has a point - I wonder if I have a chance to strike it rich getting in on his program." Except there's no program, because I'm not a con artist :) I personally don't have a view about whether Herbalife fits this description, but that's what the accusation is. Your entire comment is more or less irrelevant.