Betting on Zero Page #2

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the company has paid us

over $15,000 part-time.

And I make, right now,

I can't believe it myself,

Over $8,000 a day

To over $3,000,000 a year.

It's unbelievable!

If I can do it,

I've made a small fortune,

Actually a large fortune,

with the company,

Anyone can. It's simple.

Richard:
I think

it's a fraudulent pitch,

But it persists

over a decade, so...

It seems like

it should be something

That wall street investors

would want to take a look at.

Ackman:
I was

appropriately skeptical,

Which is the approach

we try to take

With any investment,

long or short,

And then a belgian court

found herbalife

To be a pyramid scheme

in 2011.

I thought that was kind of

a materially

interesting development,

And that's what motivated

the research.

And this is a case

where the more layers

of the onion you peeled away,

The more interesting, uh,

it became.

You follow what I say,

write this down,

You're gonna make

a minimum of

$50,000 this year.

That's

the least amount of money

that you're gonna make.

The second year,

you'll make $125,000,

And that's

the least amount of money

that you're gonna make.

Narrator:
In 1986, founder

mark hughes and herbalife

Received

a permanent injunction

from the state of california,

Barring them from making

false income

and health claims.

Nevertheless, the company

continued to thrive.

But 14 years later,

hughes was found dead

in his malibu home

Of an overdose of

antidepressants and alcohol.

And a group

of private investors

Soon took control

of herbalife.

Before listing the company on

the new york stock exchange,

They sought

and found a new leader.

Michael o. Johnson.

Johnson had risen

through the ranks

at the disney corporation

To become president

of disney international.

Announcer:
The eyes

of the world are on herbalife.

We will be faster, better,

stronger than ever before.

Narrator:

A competitive triathlete,

Johnson's passion for fitness

perfectly mirrored

his new company's image.

At herbalife,

he had a midas touch.

Revenues grew

at astonishing rates.

From $1.3 billion

to $4.8 billion

in his first 10 years.

Oh, we're just

getting started.

We're just scratching

the surface of what can be.

We haven't penetrated

the markets and communities

Anywhere close

to what we're gonna see.

Narrator:
Johnson did well

by herbalife and himself.

In 2011, he was

the highest paid ceo

in america.

His compensation package

totaled $89.4 million.

Mexican sales, up 31%.

Asia pacific, up 29%.

India, 121%!

South, central america, 44%.

This company seems

to be unstoppable.

You know, my mother and father

were incredibly

strong influences in my life.

And integrity was the name

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