siddharth18 Posted January 17, 2013 Share Posted January 17, 2013 looks like Ichan is joining in on the action on the long side http://professional.wsj.com/article/SB10001424127887323468604578245982881453300.html?mod=WSJ_hp_LEFTWhatsNewsCollection or google "Icahn Takes Herbalife Stake" Activist money manager Carl Icahn and his deputies have told other investors that he has taken a stake in Herbalife Ltd., HLF -2.45% joining a heavyweight battle that has already drawn prominent hedge-fund managers William Ackman and Daniel Loeb. .... I read somewhere that this is a rather small position for him and it's speculated that this is more about settling score and the personal vendetta Icahn has against Ackman originating from the acrimonious past deal-gone-wrong. Link to comment Share on other sites More sharing options...
Parsad Posted January 17, 2013 Share Posted January 17, 2013 looks like Ichan is joining in on the action on the long side http://professional.wsj.com/article/SB10001424127887323468604578245982881453300.html?mod=WSJ_hp_LEFTWhatsNewsCollection or google "Icahn Takes Herbalife Stake" Activist money manager Carl Icahn and his deputies have told other investors that he has taken a stake in Herbalife Ltd., HLF -2.45% joining a heavyweight battle that has already drawn prominent hedge-fund managers William Ackman and Daniel Loeb. .... I read somewhere that this is a rather small position for him and it's speculated that this is more about settling score and the personal vendetta Icahn has against Ackman originating from the acrimonious past deal-gone-wrong. You may be right, because I think this is going to be more painful for Ackman then the whole "Target" fund debacle. Cheers! Link to comment Share on other sites More sharing options...
txlaw Posted January 20, 2013 Share Posted January 20, 2013 Planet Money story on Herbalife and short selling ,generally: http://www.npr.org/blogs/money/2013/01/18/169719749/episode-431-a-billion-dollar-bet-against-weight-loss-shakes They speak to Ackman in the story. Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 16, 2013 Share Posted February 16, 2013 Chapman again. http://rdd.me/uqizdefk Anyone involved in Herbalife must read Confidence Game - that novel is the Pershing Square short raid playbook, and he’s following it to the “t” in assailing Herbalife. Without question, Ackman is zealously persistent to a fault, and I do mean to a fault. He utilizes deep and broad resources to execute a tenacious, “end of the earth” strategy to the very end. Ackman could star in the Wall Street version of Die Hard – this guy seems to have been born without a the gene that feels pain and governs conventional risk management. That being his personality trait, it takes a sledgehammer blow like his long investment Borders going bankrupt, or nearly $2 billion reported loss in Target making mincemeat out of him, for Ackman to throw in the towel. Link to comment Share on other sites More sharing options...
Guest wellmont Posted February 16, 2013 Share Posted February 16, 2013 ackman may have the blow up gene though. this one is going to be fun to watch. the more I watch Icahn, the more I respect his abilities as an investor. Link to comment Share on other sites More sharing options...
Parsad Posted February 16, 2013 Share Posted February 16, 2013 ackman may have the blow up gene though. this one is going to be fun to watch. the more I watch Icahn, the more I respect his abilities as an investor. Yes, but not as a person. Two smarty-pants, loudmouths going at it in public and then one clobbering the other by squeezing him...are there really any losers except them? Although I do enjoy Ackman's smarty pants presentations. He's a very good speaker. I suspect if he loses big, he'll close like he did before and start again. Cheers! Link to comment Share on other sites More sharing options...
Otsog Posted February 16, 2013 Share Posted February 16, 2013 How is the squeeze at all good for Icahn? He makes Ackman look dumb, but then he's the one with 500M+ of a crappy company on his books. A lot of people disagree with the thesis that HLF is going to 0 but I haven't really seen anyone make an argument that it is a good business. Link to comment Share on other sites More sharing options...
sampr01 Posted February 16, 2013 Share Posted February 16, 2013 How can you believe Chapman on herblife long thesis, he already sold ALL HLF shares yesterday (may be good trader). All I hear from Icahn, and Chapman was short squeeze, and personal vendetta. Am I the only one who thinks "Ackman is the only one presented thesis and research (Good or bad)". All I hear from other guys is "non-sense" and no thesis or no research on why there are bullish (other than talked to my FTC attorney). No position in HLF Chapman again. http://rdd.me/uqizdefk Anyone involved in Herbalife must read Confidence Game - that novel is the Pershing Square short raid playbook, and he’s following it to the “t” in assailing Herbalife. Without question, Ackman is zealously persistent to a fault, and I do mean to a fault. He utilizes deep and broad resources to execute a tenacious, “end of the earth” strategy to the very end. Ackman could star in the Wall Street version of Die Hard – this guy seems to have been born without a the gene that feels pain and governs conventional risk management. That being his personality trait, it takes a sledgehammer blow like his long investment Borders going bankrupt, or nearly $2 billion reported loss in Target making mincemeat out of him, for Ackman to throw in the towel. Link to comment Share on other sites More sharing options...
premfan Posted February 16, 2013 Share Posted February 16, 2013 Unless the regulators get involved i dont see how ackman can win this since MLM is not illegal. Its like saying coke causes cancer or that monster energy drink causes heart attacks. It cant be proven for the regulators to shut down the business. I dont like how arrogant ackman seems with this like there is no chance he can be wrong with this. To me thats a red flag not being humble even though he obviously has a strong conviction with this. I respect ackman alot as a investor but, i would be shocked if he is proved right with HLF. Link to comment Share on other sites More sharing options...
Liberty Posted February 27, 2013 Share Posted February 27, 2013 Posted in general forum, but this probably belongs here (if only for the record): http://www.vanityfair.com/online/daily/2013/02/bill-ackman-daniel-loeb-bike-ride Link to comment Share on other sites More sharing options...
dcollon Posted February 28, 2013 Share Posted February 28, 2013 Letter Legal Follow-up: Herbalife to increase the size of its board and nominate two Icahn representatives for election to board Thursday, February 28, 2013 07:26:34 PM (GMT) HLF announced that it has reached an agreement with Carl C. Icahn, Icahn Enterprises Holdings L.P. and certain related entities (collectively the “Icahn Parties”), which beneficially own, in the aggregate 14,015,151 shares of Herbalife common stock, representing approximately 13.6% of the company’s outstanding shares. As part of the agreement, Herbalife will increase the size of its board from nine to eleven members immediately before the 2013 Annual General Meeting of Shareholders Herbalife’s board of Directors will nominate two individuals to the company’s board of Directors, designated by the Icahn Parties and approved by the company’s Nominating and Corporate Governance Committee. Under the terms of the agreement, the Icahn Parties have agreed to, among other things, abide by certain standstill provisions and vote their shares in support of all of the board’s director nominees. The Icahn Parties have the right to increase the size of their ownership position in Herbalife up to 25% of the outstanding common stock. HLF shares remain halted, pending dissemination Link to comment Share on other sites More sharing options...
Parsad Posted March 13, 2013 Share Posted March 13, 2013 Wonder how much this guy lost shorting Herbalife...thus the lawsuit! Cheers! http://finance.yahoo.com/news/herbalife-short-seller-sues-banks-182110359.html Link to comment Share on other sites More sharing options...
compoundinglife Posted March 13, 2013 Share Posted March 13, 2013 Wonder how much this guy lost shorting Herbalife...thus the lawsuit! Cheers! http://finance.yahoo.com/news/herbalife-short-seller-sues-banks-182110359.html The lawyer said he has lost more than $75,000 on his short position, which began around the time Ackman announced he was shorting the stock in December. He is a lawyer so I imagine he is doing this "pro-bono" for himself :) Link to comment Share on other sites More sharing options...
jay21 Posted April 9, 2013 Share Posted April 9, 2013 http://dealbook.nytimes.com/2013/04/09/kpmg-said-to-resign-as-herbalifes-auditor-over-investigation/?partner=yahoofinance KPMG resigning as auditor. Link to comment Share on other sites More sharing options...
Parsad Posted April 9, 2013 Share Posted April 9, 2013 http://dealbook.nytimes.com/2013/04/09/kpmg-said-to-resign-as-herbalifes-auditor-over-investigation/?partner=yahoofinance KPMG resigning as auditor. Doesn't seem to have anything to do with the company's financials. Could be the partner was giving inside information on HLF. Cheers! Link to comment Share on other sites More sharing options...
muscleman Posted April 9, 2013 Share Posted April 9, 2013 http://dealbook.nytimes.com/2013/04/09/kpmg-said-to-resign-as-herbalifes-auditor-over-investigation/?partner=yahoofinance KPMG resigning as auditor. Doesn't seem to have anything to do with the company's financials. Could be the partner was giving inside information on HLF. Cheers! Are you long this? I am curious how this HLF saga will play out. If HLF is not a fraud, I think when trading resumes, the price will probably open at $20 or lower, and it will be a great chance to buy. When will it reopen is also a question that I can't figure out. Link to comment Share on other sites More sharing options...
siddharth18 Posted April 14, 2013 Share Posted April 14, 2013 What's the deal here? Almost 4 months since Ackman's publicity stunt. Stock has been vacillating between mid 30's and 40's. This translates to trailing P/E of ~9 and forward P/E much lower. Actually, when you compared to its clone NuSkin with P/E of 14, HLF's metrics seem quite savory ICahn actively involved (to the tune of bit more than half a billion dollars); Dan Loeb, Rob Chapman, John Hempton passively involved. Collectively they own close to $1 billion. Strong insider holdings and company has strong lobby (Direct Selling Association). SEC/FTC et al is not exactly oblivious of Herbalife's existence. Product might be overpriced but people still consume it (see Amazon reviews). Yes, I know Amazon represents only a microcosm of HLF's sales but still unless all the reviews and sales on Amazon are courtesy of Herbalife's shills, they mean something: http://i.imgur.com/rFLpFcm.png John Hempton's scuttlebutt seems interesting. (http://brontecapital.blogspot.com/2013/01/notes-on-visiting-herbalife-nutrition.html). This accounting expert gave it a clean bill from a solely accounting point of view (http://grumpyoldaccountants.com/blog/2013/1/30/what-do-herbalifes-financials-tell-us). Basically said numbers don't look shady but of course the company could be in trouble if regulators go sour on the company. As for catalyst: Sheer value. Propitiously, Icahn is on the long side to the tune of ~$600 million plus has board representation. Moelis & Company is involved as well. What about Ackman? Ackman's cost basis for short is around 50's. He's already in the money. If history is any guide (I'm looking at you MBIA), I doubt he'll jump ship. No bull thesis can count on him to cover his short since its only ~10% of his overall portfolio and doesn't mind waiting. Of the 32 million shares short, 16 million belong to persons besides Ackman which raises the question - Are the other shorts willing to wait YEARS (if need be) alongside Ackman for thesis to materialize)? Yes, investing in HLF can be gut-wrenching and yes, there can be no assurances of how/if/when regulators will react. There's some comfort in knowing HLF has been around for three decades, has strong insider holding, activist Icahn involved, only does 20% rev in USA and is incorporated offshore. Something's gotta give. I'm no expert when it comes to MLMs. I'm just looking for asymmetrical opportunities. I'm most biased towards 2015 LEAPS at this point for asymmetric risk/reward. Disclosure - No position yet. Link to comment Share on other sites More sharing options...
no_free_lunch Posted April 18, 2013 Share Posted April 18, 2013 Good post Siddharth. The link to Bronte capital is intriguing. If such a voracious short-seller is long HLF then that is a huge positive. I am curious your thoughts on the auditor scandal. My reading of the situation is that the audit company (I think it's KPMG) and really the auditor himself are completely to blame and this should in no way reflect badly on HLF. Nevertheless the stock took a 4-5% dive that day. Was that not just an overreaction or am I missing something? I am curious what strike price you are looking at on the options. I personally just can't justify their pricing and am looking more at the pure equity. This board is starting to make me feel very old-school buying pure stock but hey it's worked so far. Link to comment Share on other sites More sharing options...
siddharth18 Posted April 18, 2013 Share Posted April 18, 2013 Appreciate your comment...there's barely anyone on this board interested in HLF it seems! Good post Siddharth. The link to Bronte capital is intriguing. If such a voracious short-seller is long HLF then that is a huge positive. I'd assume so yeah. It's not just him being long, but he seems to have actually visited the HLF clubs so that adds a new perspective. I am curious your thoughts on the auditor scandal. My reading of the situation is that the audit company (I think it's KPMG) and really the auditor himself are completely to blame and this should in no way reflect badly on HLF. Nevertheless the stock took a 4-5% dive that day. Was that not just an overreaction or am I missing something? Overreaction as usual. Funny thing is, it wasn't just Herbalife. KPMG was Deckers Outdoor's auditor too but shares actually WENT UP after the news of the scandal. Herbalife even the contacted NYSE to keep them abreast about the delay in auditing due to KPMG's fault. I am curious what strike price you are looking at on the options. I personally just can't justify their pricing and am looking more at the pure equity. This board is starting to make me feel very old-school buying pure stock but hey it's worked so far. I look at this a binary bet. I am considering 2014 and 2015 call options. Not equity, but options because we don't know if regulators will shut it down. If they do, both equity and options CAN go to $0/share. So why risk an equal dollar amount and get fewer shares with equity, when you can get more by buying call options. Unless you think HLF will stay at this price for more than a year or two, then I'd say options are better bet. Link to comment Share on other sites More sharing options...
no_free_lunch Posted April 18, 2013 Share Posted April 18, 2013 What kind of price are you forecasting, if it works out, for 2015? I look at it and see earnings maybe in the $5 range by then. Being pessimistic, I would think 10-12x earnings would be reasonable once the regulator shutdown threat passes. I guess if people view it as a growth business maybe you get 15-18x but I hate to plan for that. With 10-12x you are looking at $50-60. If you buy the '15 $35 call at $8.8 then you have about 80%-180% upside. It could hit a higher multiple but I am not sure I would bank on that. With the equity you are looking at 50% to 70% upside. If regulators pull the pin it goes to 0, agreed. I guess the only argument I can make for equity is if you hit a general index pull-back you can wait a bit longer. As I write this out, I am actually leaning more towards the options. I think the $30 call might be a better balance as it gives you more breathing room if we are in a market slump in 2 years. As far as the binary aspect, I agree with you but think while the outcome is binary the odds heavily tilt towards it not being shut down. Link to comment Share on other sites More sharing options...
siddharth18 Posted May 17, 2013 Share Posted May 17, 2013 Shares 25% up from mid 30's to the pre-Ackman price of mid 40's. Those 2015 LEAPS up around 38% - from $8.8 (at the time of your last post to $12.1). The company continues to post strong results while the "Days to cover (shares short)" is at all time highs http://www.nasdaq.com/symbol/hlf/short-interest and Icahn simultaneously continues to up his stake http://www.businessinsider.com/carl-icahn-increases-herbalife-stake-2013-5 What's interesting is that HLF's peer NuSkin has almost doubled from the December lows. Link to comment Share on other sites More sharing options...
dcollon Posted July 24, 2013 Share Posted July 24, 2013 From Business Insider http://www.businessinsider.com/dan-loeb-herbalife-message-2013-7 Link to comment Share on other sites More sharing options...
LC Posted July 24, 2013 Share Posted July 24, 2013 Why is it that Warren is such a class of character, to have billions of dollars and still maintain both his dignity and humanity. Stories like this really confirm what a unique individual he happens to be. Link to comment Share on other sites More sharing options...
fareastwarriors Posted July 30, 2013 Share Posted July 30, 2013 http://www.forbes.com/sites/nathanvardi/2013/07/30/bill-ackmans-herbalife-nightmare-gets-100-percent-worse/ Bill Ackman's Herbalife Nightmare Gets 100 Percent Worse Link to comment Share on other sites More sharing options...
Myth465 Posted July 30, 2013 Share Posted July 30, 2013 Ackman is an idiot if he doesnt sell with all the threats floating around. Lessons learned, dont screw with Uncle Carl. He will spend money to prove his point. I think he may actually take it private just to spite Ackman. Link to comment Share on other sites More sharing options...
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