Herbalife to be bought for $685M.
April 11, 2002 6:08 AM   Subscribe

Herbalife to be bought for $685M. Does anyone else find this disturbing given the information revealed in this previous thread?
posted by bkdelong (17 comments total)
That thread you linked to is about the mystery behind the signs not anything to do with the effectiveness of the product. For all I know it snake oil, but that doesn't make a difference VCs when there are buyers waiting.

I don't like how Herbalife has been cast into an evil empire because of its spam while mainstream companies like Microsoft, Nintendo and others employ professional guerrilla marketers to spray paint logos on public sidewalks and on the sides of buildings. If signage is a problem its a local government issue. Permanent graphitti is a little more serious than stapled on signs.
posted by skallas at 6:30 AM on April 11, 2002

skallas Go back and read the stories. Your post makes no sense. The effectiveness of the product is moot compared to the fact that the market is saturated and there is no (legal) way forward. Pyramid schemes should be illegal, not tradeable. Also, the signs re not stapled in, but bolted in.
posted by magullo at 7:28 AM on April 11, 2002

Also, the signs re not stapled in, but bolted in.

Now that's quality argument.
posted by rodii at 7:37 AM on April 11, 2002

rodii I see you're another one who comments without reading the stories. A large section of the herbalife story is devoted to describing how harmful and permanent the signs are. In fact, the whole story tems from the annoying signs.
posted by magullo at 7:58 AM on April 11, 2002

I don't like how Herbalife has been cast into an evil empire... Sounds like you're stuck with "product" in your garage, skallas.

Pyramid schemes should be illegal, not tradeable. Hurrumph, magullo. And to answer the question in the original post, yes I find it disturbing that a corporation built on a house of cards is worth $685 million.
posted by Vek at 8:09 AM on April 11, 2002

magullo I read the story, you're just reading too much into it. My post is regarding the VC buyout of Herbalife and how the spamming signs have nothing to do with it - good or bad.
posted by skallas at 8:10 AM on April 11, 2002

Herbalife sells various nutritional products in 54 countries through a network of 100,000 distributors.

At least now we know that there are 100,000 people obsessed with putting signs everywhere. Now we just have to figure out how to hunt them down.

Magullo: I think what skallas is trying to say is that whoever is buying Herbalife is doing so because there is profit to be made. They are looking at the accounting books, they don't care about the signage, they probably do it themselves (the company doing the buying is a direct marketing concern with 400,000 employees)

Read the article more carefully next time.
posted by insomnyuk at 8:33 AM on April 11, 2002

i find it interesting that the "charismatic" founder of herbalife, one mark hughes, died under such happy conditions:
An autopsy revealed that Mr. Hughes, 44 years old, died in his $25 million beachfront home of an accidental overdose of alcohol and a prescription antidepressant..

what a success story. rich beyond belief, and yet a depressed alcoholic. fitting. i wish communities across the country would start quietly banning these signs so some serious legal action could eventually be taken
posted by sixtwenty3dc at 8:49 AM on April 11, 2002

The market for (being) Herbalife distributors may be saturated ... but the Herbalife products have at most low-single-digit share in the weight-loss and "nutriceuticals" market.

The main problem Herbalife faces in market share is that MLM is a fantastically expensive and inefficient system of retail distribution to the customer. Of course, one can argue that an MLM's companies true "customers" are their low-level distributors, who buy overpriced product -- and, if P.T. Barnum is to believed, the market for chumps is never saturated...
posted by MattD at 9:09 AM on April 11, 2002

And to answer the question in the original post, yes I find it disturbing that a corporation built on a house of cards is worth $685 million.

I think there were quite a few dot-coms "worth" this much or more that were built on nothing more than a house of cards, Some would say built on less than even that.

The word "worth" is in quotations because the way Wall Street does stock and company valuations is suspect at times.
posted by camworld at 9:25 AM on April 11, 2002

MattD, you're right on the money about MLMs. My wife almost got involved with one, and it was very clear that the goal was to sign up more distributors, not selling to customers. It almost made it seem that if you sold to a customer, you were a failure. Given that, the actual product is almost irrelevant.
posted by tommasz at 9:28 AM on April 11, 2002

a depressed alcoholic. fitting.
but depressed alcoholics make the world an interesting place. we owe most of our greatest art, music and terrorist acts to depressed alcoholics. george bush ought to declare a 'depressed alcoholic week' to commemorate the immense contributions of depressed alcoholics to our cultural zeitgeist.
posted by quonsar at 9:42 AM on April 11, 2002

Money cures neither depression nor alcoholism.
posted by jpoulos at 10:12 AM on April 11, 2002

lose hundreds of millions now, ask me how
posted by tsarfan at 10:34 AM on April 11, 2002

Ponzi scheme mergers, ipos, and sales are nothing new. Withness the .com era.
posted by ParisParamus at 10:47 AM on April 11, 2002

skallas, the article linked to in the previous thread does discuss the actual product -- like the fact that ephedrine, the active incredient of the original product is considered very dangerous and is illegal in several states, and there is no proof that the ephedrine-free products have any weight-loss effects at all.

and where are these "guerrilla marketers" you're speaking of? I've never seen a Microsoft or a Nintendo logo spray painted on a building. I don't know that I've seen any corporate logos of the sort, and yes, I've spent time in many large American cities. I have, however, seen MANY of the "Work at Home" and "Lose Weight Fast" signs all over... (As well as "20 People Wanted to Lose Weight," which amused me with its double meaning)
posted by dagnyscott at 1:50 PM on April 11, 2002

disturbing? not a bit

If it were one of my mutual fund managers buying it, then I'd be disturbed.

As it is, some other schmuck is going to lose money on this. Let the buyer beware.
posted by yesster at 2:20 PM on April 11, 2002

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