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Herbalife Plunges As Ackman Doubles Down On Einhorn Bear Thesis

Tyler Durden's picture




 

Back in May, Herbalife stock got monkeyhammered when one of the best performing hedge fund managers of the past few years, David Einhorn expressed a bearish thesis in the company. Today, the stock just got the double tap following no new information, but merely the second part of the Einhorn-Ackman-Loeb activist triangle (who most of the time operate as an informal cartel), as it plunged by over 10% when William Ackman, smarting from the hundreds of millions lost in JCPenney just piggybacked on Einhorn's thesis, as reported by CNBC, said he is short Herbalife, calling it a pyramid scheme, and saying he has done fundamental research for a year (it takes a year to read Einhorn's presentation?). Essentially, nothing new here.

All we await now is that 13F chaser Whitney Tilson to finally jump on board what is becoming the world's biggest hedge fund short, and get a catalyst, any catalyst that scrambles the shorts into covering, and sends the stock in the triple digit range.

 

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Wed, 12/19/2012 - 15:19 | 3079758 ACP
ACP's picture

ZZZZZZZZZZZzzzzzzzzzzzzzzz...

Thu, 12/20/2012 - 00:27 | 3081292 Call me Ishmael
Call me Ishmael's picture

ZeroHedge you disappoint me.

Einhorn asked one question on a conference call in May and that's all. He made no comment, no thesis, and no presentation about Herbalife.

Does this article dispute or affirm that Herbalife is a pyramid scheme? Ackman and Einhorn were among the handful of people that predicted the fall of Lehman and the 2008 crisis. Do you dispute that Ackman took a long look at Herbalife and sees a fraud?

As for Tilson and other funds, I know put options are on 13Fs, but not short positions. What is your source for HLF being the most shorted by hedge funds?

Thu, 12/20/2012 - 08:35 | 3082036 StychoKiller
StychoKiller's picture

HerbaLife is a multi-level marketing co.  As long as they continue to sell/move products and not just sponsor new associates, it's not a pyramid scheme.

Wed, 12/19/2012 - 15:20 | 3079761 Cognitive Dissonance
Cognitive Dissonance's picture

If your Herbalife long lasts for more than 4 hours please call David Einhorn.

Wed, 12/19/2012 - 22:09 | 3081270 Thomas
Thomas's picture

David is very patient. When he finds a killing field of dead bodies, he doesn't get shaken out.

Wed, 12/19/2012 - 15:23 | 3079776 MillionDollarBoner_
MillionDollarBoner_'s picture

Is Herbalife a precious metal now...?

Wed, 12/19/2012 - 15:31 | 3079821 Yen Cross
Yen Cross's picture

 Herbalife = Blue Pill

Wed, 12/19/2012 - 15:40 | 3079864 rubearish10
rubearish10's picture

Wait a minute, why doesn't this happen to US Treasury's when it's called a Ponzi/Pyramid scheme by some smart people? WTF?

Wed, 12/19/2012 - 16:04 | 3079969 insanelysane
insanelysane's picture

Exactly!  Only some of these schemes are deemed "illegal" by the government.  If Corzine is the next CEO of HerbalLife, all will be well.

Wed, 12/19/2012 - 16:08 | 3079980 Kreditanstalt
Kreditanstalt's picture

https://en.wikipedia.org/wiki/Herbalife

 

Another multi-level marketing company.  THIS is the new American economy...doesn't MAKE anything essential , just...markets...consoomer stuff....?

Acually it doesn't matter anyway...just another casino counter to put bets on...

Thu, 12/20/2012 - 08:37 | 3082040 StychoKiller
StychoKiller's picture

I'm surprised that any MLM can compete against the internet, which cuts out a lotta middle(wo)men.

Wed, 12/19/2012 - 16:38 | 3080067 Karl von Bahnhof
Karl von Bahnhof's picture

HotAir.com

Wed, 12/19/2012 - 16:46 | 3080094 buzzsaw99
buzzsaw99's picture

duh, the whole stock market is a pyramid scheme.

Wed, 12/19/2012 - 17:05 | 3080151 pavman
pavman's picture

Herbalife is a listed company?!  Who knew!  Holy placebo batman!

Wed, 12/19/2012 - 17:08 | 3080161 ZeroAvatar
ZeroAvatar's picture

I was buying puts on HLF a few years back.  It JUST WOULD NOT go down.

Wed, 12/19/2012 - 18:26 | 3080511 adr
adr's picture

Herbalife is one of the biggest scams in history. A company that has no stores or wholesale accounts of any kind, which reports internal sales revenue only, yet has one of the largest headquarter complexes in LA.

That is if the company is actually supposed to make money selling products. My thesis is that Herbalife is a shell corporation for laundering billions of dollars in human trafficking and drug money.

Seriously, if you are in Torrance CA drive by Hebalife's headquarters sometime and ask yourself if you have ever seen one of their products. Of course the directors are rolling on self generated stock grant cash.

Thu, 12/20/2012 - 00:32 | 3081619 golfrattt
golfrattt's picture

Looks like Gmcr all over again. Same option exercise history, every officer continually cashing in options...

 

Last time i looked, Gmcr went from $100 to $30 in a butt fart..

Thu, 12/20/2012 - 06:31 | 3081930 Tekrunner
Tekrunner's picture

Herbalife doesn't make money by selling products. It makes money by exploiting human gullibility. As such I don't see it failing any time soon.

Wed, 12/19/2012 - 18:45 | 3080585 Little Boots
Little Boots's picture

but if tilson is going to piggyback then im putting on the "anti future tilson" trade...long hlf short jcp

Wed, 12/19/2012 - 19:11 | 3080678 conspicio
conspicio's picture

Herbalife has poured money hand over fist into the LA Galaxy. Wonder how long before they fold their interest now that Becks and Posh are departing the premises $200M richer? Meanwhile "The bottom 99% (99.24%) of all Herbalife sales representatives earn a mean average income of $1.65/wk. before all business expenses and inventory purchases are deducted." Source: Herbalife v. Ford (2009)

 

Those MLM folks have it all figger'd out. Golden Gate and Whitney just chuckle and cash the checks on the way down.

 

 

Thu, 12/20/2012 - 08:40 | 3082045 StychoKiller
StychoKiller's picture

The real munny is made selling business/training books & tapes, not selling the MLM product(s).

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