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  "documentTitle": "Herbalife, Ltd. (HLF)",
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  "authorName": "Pershing Square Capital Management",
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  "presentationDate": "2013-04-09 00:00:00",
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  "notes": "This is a page from a Pershing Square research note criticizing Herbalife's business model.",
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      "text": "High turnover of participants is another characteristic of a pyramid scheme.",
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      "text": "distributor failure rate: 93%",
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      "text": "Misleading Statistics and Failure to Disclose Net Income After Expenses. Any reasonable promotion of a business opportunity should make clear the net income a typical new participant can expect to achieve – after paying all of the business’ expenses.",
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      "text": "Other Fees and Charges. Herbalife charges its distributors numerous additional fees (typically calculated as a percentage of the inflated SRP) that we believe are not readily apparent to recruits.",
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      "text": "Inflated SRP. Based on our analysis, we believe Herbalife’s “Suggested Retail Price” (SRP) at which distributors are told to resell products is two-to-three times the cost of similar and better-known, commodity-like products.",
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      "text": "Herbalife’s Statement of Gross Compensation uses its own selective term ‘Active Leaders’ (excluding those who earn no commissions) and includes President’s Team and Millionaire Team (with median annual earnings of $336,901 and $97,303, respectively).",
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      "text": "High turnover of participants is another characteristic of a pyramid scheme. We estimate that approximately 90% of Herbalife Sales Leaders have turned over.",
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      "text": "In a 1998 statement to the IMF, former FTC General Counsel Debra Valentine noted that inflated prices are indicative of a pyramid scheme.",
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