{ "docId": "019dd923-622c-750b-8b9b-74abb4a757e7", "docSlug": "886ebab3088d", "documentTitle": "Herbalife, Ltd. (HLF)", "authorId": "01_Pershing_Square", "authorName": "William Ackman", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2012-12-20 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 116, "pageCount": 334, "prevPage": 115, "nextPage": 117, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses highlighting and underlining to draw attention to specific claims made by the CFO regarding the FTC's stance on self-consumption.", "elementsJson": [ "headline_text", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9b-74abb4a757e7/116", "deckHref": "/decks/019dd923-622c-750b-8b9b-74abb4a757e7", "deckJsonHref": "/decks/019dd923-622c-750b-8b9b-74abb4a757e7.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9b-74abb4a757e7#slide-116", "components": [ { "bbox": null, "kind": "callout", "text": "If you go back to the old Avon model, before they were multilevel, right, self-consumption, not even an issue. It isn't not even covered on the FTC's website. It is expected.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-1ac1-76e9-bcc2-c7bb603fd727", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.18, "w": 0.88, "x": 0.06, "y": 0.75 }, "kind": "paragraph", "text": "But at the end of the day, it really doesn't matter. It is all about consumption. And if people get in this business for self-consumption or to make a little bit of extra money, which is what most people get in the business, we're fine with that, as long as the product is being consumed. I think it has been misrepresented as the product needs to be consumed outside the network, which it does not. A, the FTC said it does not. But, B, when you think of the 82% of the people at single-level, which is, again, that is all they are, it is not even a consideration as a challenge to the model.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1276a7ab-0ad2-4f7b-9c79-2cf253bf0668", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.88, "x": 0.06, "y": 0.42 }, "kind": "paragraph", "text": "So, the attempt -- I'm going to go back to the beginning of this -- so the attempt of Herbalife 101 was to break the distributors into single and multilevel. Why? Because A, it is truly single, and B, nobody questions single-level, knowing that most people who are in single-level aren't in it to make a lot of money. They are either in it for part time or it is self-consumption. If you go back to the old Avon model, before they were multilevel, right, self-consumption, not even an issue. It isn't not even covered on the FTC's website. It is expected.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "6343d7af-04b9-4e93-8dbd-61198e56d979", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.88, "x": 0.06, "y": 0.24 }, "kind": "paragraph", "text": "MAY 23, 2012 / 12:15PM, HLF - HERBALIFE LTD at Citi Global Consumer Conference", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "68f69f11-5b3d-4fe8-b90b-07d9f3bd417e", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.3, "x": 0.06, "y": 0.37 }, "kind": "paragraph", "text": "John DeSimone - Herbalife Ltd. - CFO", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "9186f6e3-c6c9-496d-8c73-2d9c89ac49b3", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.88, "x": 0.06, "y": 0.58 }, "kind": "paragraph", "text": "So what we are trying to educate the investment community and the media in general is those distributors have no earnings opportunity in the multilevel component. Okay? Yet when the press does their math, they get that 99%, and they use that 82% in the denominator, but they don't use the right numerator. They use -- I'm going to go to this page -- I think it is page five -- give me a second -- they use that far left -- that far right bar, which is the smaller piece of the earnings opportunity.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a43deb43-7cd4-49f9-ae29-01b8b30d8bcd", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "So, the attempt -- I'm going to go back to the beginning of this -- so the attempt of Herbalife 101 was to break the distributors into single and multilevel. Why? Because A, it is truly single, and B, nobody questions single-level, knowing that most people who are in single-level aren't in it to make a lot of money. They are either in it for part time or it is self-consumption. If you go back to the old Avon model, before they were multilevel, right, self-consumption, not even an issue. It isn't not even covered on the FTC's website. It is expected. — John DeSimone, CFO, Herbalife Ltd.", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-1ac1-76e9-bcc2-ca256b25b12b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.92, "x": 0.04, "y": 0.04 }, "kind": "title", "text": "Herbalife Says that the FTC is not Concerned about Internal Consumption", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "dba18329-04d7-45e6-b985-39fe0867d94e", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "27ee2e40-f10f-4700-acfb-98c9ba55de3c", "evidence": "The slide highlights specific claims by the CFO to contrast with potential regulatory reality.", "confidence": 0.9 } ], "arcBeats": [ { "to": 150, "from": 6, "beatId": "5f7d58b7-65aa-4344-b7b3-2f8a867ee10c", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "The document extensively uses this beat to highlight contradictions in Herbalife's statements and practices.", "position": 0, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [ { "to": 150, "from": 6, "name": "Logic Chain", "slug": "01-logic-chain", "bestFor": "Skeptical audiences, controversial recommendations, rigorous analysis", "matchId": "1adf2f4c-7781-447d-8ff2-151cfcce11be", "evidence": "The document builds a logical argument against Herbalife's practices.", "position": 0, "objective": "To demonstrate that Herbalife's business model is flawed", "structure": "Premise 1 (Accepted truth) -> Premise 2 (Observed fact) -> Therefore... 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