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Is Herbalife a 'pyramid scheme' destined to fail?

Is Herbalife a pyramid scheme destined to fail
Hedge fund manager Bill Ackman doesn't think Herbalife is all it's cracked up to be. His price target for the company might raise eyebrows.

Influential short seller Bill Ackman, who has been after Herbalife for a few months, just came out today with a new price target for the MLM heavyweight: $0, reported Business Insider.

Ackman's recent pronouncements caused Herbalife stock to plunge to about $24 before Christmas, though the price has rebounded to about $40.

Ackman, called an "activist investor" with his firm of Pershing Square Capital, plays the game to try to effect change in companies, though what he's trying to do with Herbalife is anyone's guess—likely something against MLMs in general, which is why he has characterized the company as a pyramid scheme.

Herbalife CEO Michael Johnson has given a fiery response, saying the world will be a better place when Ackman is gone.

The latest imbroglio came about because of Herbalife's "nutrition clubs," an initiative that was one reason for Herbalife's successful stock pricing over the past year.

Here's a video interview with Johnson from last summer's NBJ Summit.

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