Herbalife was more than 30 minutes into its conference call when the operator turned the call’s second question over to David Einhorn of Greenlight Capital.
Seconds later the stock would collapse nearly 20 percent, erasing about $2 billion in market cap.
Below, the full questions that triggered the sell-off.
“First is, how much of the sales that you’d make in terms of final sales are sold outside the network and how much are consumed within the distributor base?”
“What is the incentive for supervisor to sign somebody up to become a distributor as opposed to – if they’re just going to consume for themselves as opposed to just selling them the product for the markup. How does the distributor – how does the supervisor come out better?”
“When you had your previous 10-K, you disclosed three groups of distributors at the low-end. You called 29% self consumers, 57% small retailers, and 14% potential sales leaders and then that disclosure did not repeat in the subsequent 10-K. So, I got two questions, first of all how do you track that and how do you characterize and know which ones are which? And second, why did you stop disclosing that in the last 10-K? Is that something that you stopped tracking or just stopped disclosing?”
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