Critics have questioned the company's business model, which uses a network of distributors to sell its nutritional supplements and weight-loss products in more than 80 countries.
The defense put forth Thursday comes a few weeks after Ackman alleged Herbalife was a pyramid scheme and that he was shorting the stock. Short-sellers make money when the shares they’re betting against decline.
Under a pyramid scheme, a company makes most of its money by recruiting new salespeople, rather than on the products that they sell. Aside from Ackman, Greenlight Capital’s David Einhorn had also raised concerns about Herbalife’s business in May.
Herbalife President Desmond Walsh said Thursday that over its 32-year history, only one court has ruled that the company runs an illegal pyramid scheme. The ruling, which occurred in Belgium, is being appealed.
Walsh said that ruling has not hurt Herbalife’s business in the country. He also balked at Ackman’s claims that Herbalife uses a “pop-and-drop” approach to the markets it serves - entering a market, making money as fast as it can and then pulling out and moving on to new markets. Walsh said this is not true and that much of Herbalife’s growth is coming from markets it has served for more than 10 years.
- Herbalife defends itself against short seller’s claims, AP, January 10, 2013.
Related stories:
Hot seat?
Off color?
【Terry Davis came out swinging】相关文章:
最新
2020-09-15
2020-08-28
2020-08-21
2020-08-19
2020-08-14
2020-08-12