Boom Bust Season 1 Episode 53 Accounting Shenanigans: Herbalife, Multi-tier Marketing, Pyramid Schemes and Zynga

Boom Bust season 1 episode 53 delves into the world of shady accounting practices and questionable business models. The episode focuses on four specific examples: Herbalife, multi-tier marketing, pyramid schemes, and Zynga.

First up is Herbalife, a company that sells dietary supplements and weight loss products. The company has been the subject of intense scrutiny for years, with many accusing it of being a pyramid scheme. The company has always denied these claims, but in 2016, it was forced to pay $200 million to the Federal Trade Commission to settle allegations that it deceived customers into believing they could earn substantial income by selling Herbalife products.

Next, the episode explores the world of multi-tier marketing, also known as network marketing. This is a business model in which companies recruit independent salespeople to sell their products, and those salespeople in turn recruit others to sell under them. The salespeople earn commissions not only on their own sales, but also on the sales of those they recruit. While multi-tier marketing is legal, many critics argue that it is a thinly veiled pyramid scheme that primarily benefits those at the top of the pyramid.

The episode then turns to the topic of pyramid schemes, which are illegal. Pyramid schemes are similar to multi-tier marketing in that they involve recruiting others to sell products and earn commissions, but they differ in that the main focus is on recruiting others rather than selling actual products. Those at the top of the pyramid make money by taking a cut of the commissions earned by those beneath them, while those at the bottom often end up losing money.

Finally, the episode examines the case of Zynga, a mobile game company best known for creating popular games such as FarmVille and Words with Friends. In 2012, the company went public in a highly anticipated IPO. However, the company's stock soon took a nosedive, and many investors accused the company of accounting shenanigans and insider selling. The episode takes a closer look at these allegations and explores what may have gone wrong at the once-hot tech company.

Overall, Boom Bust season 1 episode 53 sheds light on some of the more dubious business practices that exist in the corporate world. From Herbalife to Zynga, the episode takes a hard look at companies that may have played fast and loose with their finances, and raises important questions about how investors can protect themselves from such risks.