How can you buy Herbalife shares?
Herbalife is a so-called MLM or multi-level marketing company. Herbalife customers can bring in new customers and then receive a commission on the products they sell. This business model does not always seem to be equally successful for the users themselves, but it does generate a lot of money for the company itself. In this article you can read how you can benefit from the success of Herbalife: namely by buying shares! You can also consult the current share price of Herbalife here.
Despite the many scandals, Herbalife still manages to produce good results. I would not recommend anyone to become a salesman for the company, but an investment in the stock is worth a consideration. New, modern sales models fit well at a time when people are increasingly looking for ways to shape their lives.
It is important to buy the shares from a broker with low transaction costs. That way, you do not waste any costs on your broker, which allows you to make a bigger return. An example of a good broker is eToro. At eToro you do not pay set commissions so you can get a better result with investments in Herbalife. Use the button below to open an account directly with this broker:Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
How to actively invest in Herbalife?
You can increase your return by actively speculating on the price of herbal life shares. The company Herbalife is regularly in the spotlight negatively. The entire MLM system is close to a pyramid scam, causing organizations and governments to regularly sue the company or cast it in a bad light. Events like this can put immediate pressure on the stock price.
Fortunately, as an active investor, you can respond to these kinds of developments. You do this by taking a short position. With a short position, you achieve a positive result when the price of the Herbalife share falls. You can do this by using CFDs at the broker Plus500. Do you want to try this way of actively trading risk-free with a demo? Then use the button below to open a free demo at Plus500:72% of retail CFD accounts lose money.
What is Herbalife’s stock price?
Are you curious about the performance of the CFD stock Herbalife? In the graph below you can immediately see how the stock has done over the past period. You can open a trading position directly on the CFD share by using the buttons.
About the company Herbalife
Mark Hughes founded Herbalife in 1980. The then 19-year-old Hughes had a mother who was addicted to diet pills. After she accidentally overdosed on diet pills, she passed away. That is the reason he wanted to find a way to make people lose weight effectively and safely.
Good nutrition was important. Thanks to Herbalife products, people can safely reduce their weight. The company, founded by Mark Hughes, became a success. Turnover at the end of the first year was a whopping $2 million. Herbalife is headquartered in Los Angeles, California.
The company Herbalife Nutrition sells food products. The areas the company focuses on are weight loss, facial care, body care, sports and breakfasts items. Some products they sell are protein shakes, protein bars, tea, aloe, and vitamins. The company’s first product was the soy-based meal replacement shake Formula 1.
The company’s products focus on herbs and other natural ingredients. A scientific advisory board set up by the company guarantees the quality of the products. The company has its own Cellular and Molecular Nutrion Laboratory at the University of Los Angeles.
In the US and China, the company has 5 production companies. In addition, products are manufactured by the production companies of external partners. There has been a botanical extraction facility in Changsa, Hunan Province, in China, since 2013. There, the botanical extracts used in many herbal life products, such as chamomile, guarana, broccoli and blueberry, are manufactured.
Sale of the products
The company does multi-level marketing. Products are sold by direct sale to customers. In addition, Herbalife makes money by selling their products to distributors. A network of approximately 2.7 million independent sellers distributes their products in more than 90 countries.
In addition, there are also indirect sales. Through websites and advertisements in major newspapers, new members are recruited. Someone who already sells Herbalife products can bring in a new member. The new member buys the products from him and the existing member receives a commission for this.
New members can also bring in new members themselves. Both the new member and the original seller will then receive a commission. He is therefore rewarded both for his own sales and for the sales of members a tier below his own.
Accused of pyramid sale multiple times
Herbalife has been accused of pyramid sales schemes several times. The Belgian consumer organization Test-purchase filed a lawsuit against the company for illegal pyramid sales. They did this because every member of the company could mainly make money by bringing in new members: This is a closed sales circuit. After initially being proved right by the judge, the judgment was rejected on appeal.
American investor Bill Ackmann also characterized the company’s sales method as a pyramid scheme. Following his comments in 2015, the company’s stock market value fell. Ackmann, who took a 1 million short position on Herbalife’s shares, had a stake in making those comments. The FBI investigated whether Ackmann had deliberately manipulated the company’s stock price.
The U.S. Federal Trade Commission and the state of Illinois investigated Herbalife’s conduct in 2014. This investigation was not without consequences. In 2016, the company decided to change its business model in the US. In addition, a settlement of $200 million was paid.
Herbalife’s business model is at times close to fraud. This is a risk that you as an investor need to be aware of. Therefore, keep a close eye on the laws surrounding MLM marketing before you buy Herbalife shares.