{
  "docId": "019dd923-622c-750b-8b9b-9e6bdedc5eed",
  "docSlug": "f39479b88775",
  "documentTitle": "Herbalife, Ltd. (HLF)",
  "authorId": "01_Pershing_Square",
  "authorName": "William Ackman",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "activist_investor",
  "sourceTypeLabel": "Activist investor",
  "presentationDate": "2015-08-01 00:00:00",
  "orientation": "landscape",
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  "pageNumber": 54,
  "pageCount": 63,
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  "slideType": "expose_contradiction",
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  "notes": "This slide is a classic 'fraud exposure' or 'villain critique' slide, common in activist short-seller presentations.",
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  "components": [
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      "kind": "callout",
      "text": "Based upon our research in China and our examination of Herbalife's SEC filings and internal documents, we conclude that Herbalife violates China's directing-selling and pyramid-sales laws by:",
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      "kind": "list",
      "text": "Paying multi-level royalties based upon unlimited downline levels\nPaying royalties and commissions totaling more than 30% of sales volume\nIncentivizing Distributors to recruit a potentially infinite downline in order for Distributors to reap sales-based “Consulting Fees”\nPermitting and incentivizing individual Distributors to recruit other participants",
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      "kind": "paragraph",
      "text": "Based upon our research in China and our examination of Herbalife's SEC filings and internal documents, we conclude that Herbalife violates China's directing-selling and pyramid-sales laws by:",
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      "kind": "paragraph",
      "text": "In addition, Herbalife’s SEC filings misleadingly report its sales-based royalties and commissions as an expense called “China Sales Employees” in SG&A (not as Royalty Overrides, as it does for other markets), which has the effect of obscuring that China commissions are calculated using the same sales-based royalty percentages as elsewhere",
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      "kind": "title",
      "text": "Herbalife in China - Synopsis",
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      "evidence": "The presentation concludes with a call for action, highlighting the need for regulators to take action against Herbalife's allegedly illegal practices.",
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      "name": "Cost Of Inaction",
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      "evidence": "The presentation emphasizes the need for regulators to take action against Herbalife.",
      "position": 1,
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      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
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      "description": "Quantify what happens if the audience does nothing"
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