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Bill Keep’s Open Letter To Warren Buffett On MLM

MLM News November 19, 2014

Bill Keep’s Open Letter To Warren Buffett On MLM
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expert has asked Warren Buffett for support in creating clear standards for legal MLM, but has yet to hear back

Now that Pampered Chef, the multi-level marketing company owned by Inc. (NYSE:BRK.A) (NYSE:BRK.B), has a new CEO, MLM expert and dean of the College of New Jersey School of Business Bill Keep is hoping to get some support in setting clearer standards on what is or is not a pyramid scheme. To do that, he’s published a letter that he sent to Warren Buffett earlier this year, with no response, possibly hoping to get the attention of the Pampered Chef CEO Tracy Britt Cool.

“I ask that you consider, as an owner of an MLM company, the value of having clear and public standards that differentiate a legal MLM from a pyramid scheme,” Bill Keep wrote in the letter, dated August 25, which he tweeted today. “Should you conclude that such standards are important to protect consumers and investors, I ask that you publicly address the issue.”

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Bill Keep: No standard for what separates MLM and

As Bill Keep and others have explained before, when you’re trying to figure out if a company is a legal MLM or a pyramid scheme, the central question is whether their revenue comes from primarily from selling goods or from recruitment. But more sophisticated pyramid schemes also make some amount of money from selling actual products and treat internal demand as a legitimate source of sales, muddying the water. This year’s ruling on BurnLounge addressed the issue, but didn’t actually resolve it, and of course Bill Ackman’s billion dollar Ltd. (NYSE:HLF) short rests on his belief that the weight loss shakes are just a guise for an international fraud.

Part of the difficulty of discussing a company like Herbalife Ltd. (NYSE:HLF) is that people disagree on both the facts and the criteria: if different groups can’t even agree on what constitutes a pyramid scheme in the abstract deciding whether a specific company is one or not becomes impossible.

Cool likely has other priorities right now

Right now, the highest profile people in the debate have very clear vested interests one way or the other. Since Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) owns Pampered Chef, Buffett isn’t entirely disinterested either, but as long as he doesn’t have a position on Herbalife Ltd. (NYSE:HLF) he could be seen as a neutral commentator. He also has a lot of social and political clout and could build some momentum for clearer standards.

Unfortunately for Bill Keep, Cool, who has just taken over from Pampered Chef founder , is a young CEO who still has to prove that she can run a profitable company. Getting involved in another company’s regulatory battle probably isn’t a high priority.

 

 

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Soros Fund Management cut Herbalife bet in 3rd qtr after company missed earnings

MLM News November 19, 2014

Soros Fund Management cut Herbalife bet in 3rd qtr after company missed earnings
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one of the world’s most widely followed investment firms, slashed its stake in Herbalife Ltd. by 60 per cent during the third quarter, a period when Herbalife missed

and his family, sold 2.8 million shares of the nutrition and weight loss company, bringing its stake to 1.8 million shares at the end of September, a filing with the Securities and Exchange Commission on Friday showed.

began betting on its demise in December 2012 with a $1 billion short position. Ackman claims that Herbalife is a pyramid scheme in which distributors earn more money by bringing in new recruits than by the actual sale of products to consumers. The company has steadfastly denied those claims.

Icahn, Herbalife’s biggest investor and who has a handful of directors on the company’s board, held his stake steady at 17 million shares, his SEC filing showed.

This year, Herbalife has lost speed. Its stock price tumbled 32 per cent during the second quarter when the company missed analysts’ consensus earnings estimates for the first time since 2008 and cut its full-year revenue forecast. It missed earnings forecasts again in the third quarter, and its stock price has lost 51 per cent this year.

Herbalife still has supporters, including Richard Perry’s Perry Capital, Herbalife’s sixth largest investor, which raised its stake by 39 per cent, to 5.6 million shares.

Source from http://articles.economictimes.indiatimes.com/2014-11-15//56115221_1_earnings-estimates-carl-icahn-tiger-consumer-management

 

‘Direct selling industry can touch Rs 64,500 crore by 2025’

MLM News November 18, 2014

‘Direct selling industry can touch Rs 64,500 crore by 2025’
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In India, market is around 0.08% of the GDP at the moment, and hence has huge potential to grow.

Once clear regulatory guidelines are in place, the

industry has the potential to touch Rs 64,500 crore in

by 2025, from a Rs 7,200 crore size now, felt industry experts here.

Talking at sidelines of the Federation of Indian Chambers of Commerce and Industry (FICCI), Rajandeep Singh, manager, strategy, strategy & operations, management consulting,

said that countries with a thriving direct selling market, have direct selling market to

 

 

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