THE FUNDING BEHIND THIS “HERBALIFE DOCUMENTARY”: Short seller John Fichthorn of Dialectic Capital announced in August 2016 that he funded the Betting on Zero film. Dialectic Capital maintains a short position in a direct selling company. In addition, Fichthorn admitted he shorted Herbalife’s stock in 2014, and he said he would “absolutely” consider doing so again. His financial interest in the failure of direct selling companies reveals his true reason for making this “infomercial.”
THE FACTS: These facts directly contradict what the director previously told Herbalife and its attorneys about the source of the film’s funding. In fact, the director, Ted Braun, stated emphatically, on multiple occasions and in conversations with multiple people, that the funder was merely a business person interested in financing a series of films about American business and that the funder did not have and never had a financial interest in Herbalife.
Yet, in an interview before the film’s premiere, the director said the “film takes great length to remain independent of both parties,” and that it is his “responsibility to offer the audience some perspective.”
QUESTIONS TO ASK: If that’s true, why doesn’t the film disclose that it was funded by someone who was, and may again, short Herbalife’s stock? And why not disclose that this same person is a known critic of the direct selling industry, is presently shorting other direct selling companies, and thus has a financial interest related to the demise of the industry? Why during several meetings with Herbalife prior to production did the director say the funder did not, and never had, a financial interest in Herbalife? Why aren’t any of Herbalife’s 4 million satisfied distributors and customers featured in the film?
THE REASON IS CLEAR: The film is merely an attempt to manipulate the stock price of direct selling companies so investors can profit.