Test-Aankpoop

My Nederlands is a bit roestig, but nonetheless I have to wonder why Bill Ackman is still hosting the 2011 Test-Aankoop ruling on his website. Maybe Moelis’s main pitch on why investors should pull their money from Pershing is that he’s basing his investment decisions on outdated information. Maybe Moelis is simply referring to Ackman’s new 100:8:9:26 rule. I guess another possibility is that Shane Dinneen’s Texas accent doesn’t translate well into Dutch or after paying out the bonus pool this year, Pershing just can’t afford a translator?  Or MAYBE, just maybe, he already read it and realized just how damning it is to his thesis. I’d like to believe that he just couldn't afford to drop the ruling into Google translate, but I figure I’ll help him out a bit. In an offer as equally magnanimous as Ackman's offers to Herbalife, I thought it would be very kind of me to provide translation services zonder aanklacht. 

In Herbalife’s recently successful appeal heard in front of the 8^th Chamber of the Belgian Court of Appeals in Brussels, the panel considered multiple aspects of Article 91, 14° regarding market practices and consumer protection. I have to say that as wont as I am to dork out and dig in to some really inane details looking for patterns that others miss, this decision plays like a fugue in that the pattern becomes obvious once you recognize it. Thank goodness for me they make the pattern pretty obvious. In it's ruling the court introduces an element of the accusations against Herbalife, with all it's interwoven membranes, and then systematically demonstrates why those accusations are false. Subject, answer, countersubject, imitation. They do it time and time again.

In its ruling the court made extremely clear that under all circumstances the following commercial practices were verboden:

• establishing, managing or promoting a pyramid scheme in which a consumer or an enterprise, after payment, is likely to receive a compensation that is derived primarily from the introduction of new consumers in the scheme rather than from the sale or consumption of products.
• unfair business to consumer commercial practices
• establishing, managing or promoting a pyramid scheme in which a company, after payment, is likely to receive compensation derived from the introduction of new companies into the scheme rather than from the sale or consumption of products.

The Court goes on in its ruling to make it explicitly clear that “first and foremost that the distributor who wishes to obtain access to the system should not be required to pay any subscription or entry fee in order to obtain this.” The court recognizes that distributors must purchase IBP’s from Herbalife to gain entry, however the €107.15 cost of the IBP is reasonable for the four products contained in the IBP. Furthermore the court notes that because a distributor can return the IBP within 90 days and be refunded their money (even if opened) the price of an IBP cannot be considered a subscription/entry fee. Effectively the court pretty much rips the rotzak off Ackman and his thesis by stating that a consumer/distributor or company does not obtain entry into the sales system of Herbalife by virtue of a payment. 

The court also clearly stated that Herbalife distributors do not have the obligation to place a minimum number of orders within a certain period of time, nor do they have to maintain a minimum stock of products.

The court then goes on to expand upon Herbalife's refund policy by stating that prior to 2012, Herbalife deducted 10% from refunds for restocking fee, but noted that in and of itself that did not come close to building a pyramid. They actually referred to the Seldia European Code of Ethics (European Direct Sellers Association) which explicitly state that 90% of a direct sale purchase price must be repaid in a refund. So even though Herbalife dropped this 10% fee, they were never violating any guidelines when they were keeping 10%. The Belgian court also noted that Test-Aankoop couldn’t “submit a single complaint of a Belgian Herbalife client” who felt they had been ripped off by the refund policy (and we all know know how much Europeans love to complain). My mind immediately thinks about the hundreds of thousands of Americans that bought products (yet only a couple hundred filed complaints) and also I have to ask why the fuck Bostick didn't just return all that shit he ordered instead of giving it all away? 

In one of the most damning sentences within the ruling the court states that deducting “royalty overrides,” bonuses, commissions etc. off of returns and adjusting distributor qualifications should be considered a safety measure that prevents the downline from inventory loading. So, just like John Hempton has been saying all along, there aren't garages full of Herbalife products because inventory loading is discouraged, hence why there aren't inventory liquidations en masse.

My favorite passage is worthy of including verbatim:

"That there is an apparent large rotation of distributors does not necessarily imply that the system is unlawful. It can be caused by the fact that the involved party wanted to do this only for a limited time or to finance a certain important purchase, with the conclusion that after a certain period of time, that this kind of involvement isn't for him or due to the fact that he only wanted to buy the products for personal use and wanted to enjoy the 25% discount."

DAMN Ackman!!!! You just got bezeten son!

As much mierenneuken Bill Ackman has undertaken in an effort to convince the world that he is correct, he seems to have a knack for ignoring when the world is telling him that he is wrong. Ackman's Herbalife shpeel reminds me of Wim Delvoye's Cloaca; Delvoye reconstructed the human gastrointestinal tract in sculptural form and then put it on exhibit for all the world to see. As fun an exercise as the whole thing may be for Dhr. Rotzak-man, at the end of the day the return on the effort spent will still be nothing more than an aesthetically pleasing load of shit (at best), for which he will ultimately manage to get people to give him money for.