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Third Point Reports 8.24% Stake In Herbalife, Stock Soars As Shorts Pummeled

Tyler Durden's picture




 

As we warned on December 26, when the stock was trading in the mid 20's the pain for shorts is horrible and getting worse (courtesy of the best and always absolutely certain contrarian signal - the involvement of Whitney Tilson) and is about to send the stock into the stratosphere following a very surprising announcement by none other than Bill Ackman buddy Dan Loeb, who just filed a 13F reporting a 8.24% passive stake in Herbalife sending the stock surging. In other news: this may be Herbadeath for Whitney Tilson, who may well be on track to blow up a second fund in under a year.

From the 13G

Amount beneficially owned:

 

8,900,000 shares. The Reporting Persons share voting and dispositive power over the shares held directly by the Funds, but no Fund individually holds greater than 5% of the outstanding Common Stock of the Issuer. Each of the Reporting Persons disclaims beneficial ownership of these securities (except to the extent of any pecuniary interest therein), and this report shall not be deemed an admission that either of them is the beneficial owner of such securities for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended, or for any other purposes.

 

Percent of class: 8.24%.

And as we showed yesterday, Tilson is now nearly 100% underwater on his HLF short.

Don't worry though if you think you missed the train: you haven't - judging by the number of shorts in the name, the squeezability of the stock is ripe for the taking. Light blue is the short interest in HLF. Oops.

 

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Wed, 01/09/2013 - 11:17 | 3136381 ar01
ar01's picture

Is the anti-Tilson ETF still going strong?

Wed, 01/09/2013 - 11:19 | 3136390 Cognitive Dissonance
Cognitive Dissonance's picture

Whocouldofseenitcoming?

Wed, 01/09/2013 - 11:39 | 3136507 DeadFred
DeadFred's picture

Maybe Tyler? I love his posts on overbought/over shorted stocks. It's been entertaining to watch the action after his Tilson call. Looks like more kicks and giggles to come. Keep 'em coming.

Wed, 01/09/2013 - 11:21 | 3136399 kato
kato's picture

it is funny to me. because i have been caught in a short squeeze. but not this time. homer simpson laugh: 'heh heh heh'

Wed, 01/09/2013 - 11:29 | 3136436 buzzsaw99
buzzsaw99's picture

i would love to see some epic volkswagen type action

Wed, 01/09/2013 - 11:21 | 3136402 fonzannoon
fonzannoon's picture

This market is going to torch any shorts who get in it's way. Bottom line. When the repubs cave and raise the debt ceiling there is nothing keeping this thing from ripping to stratospheric heights.

Wed, 01/09/2013 - 11:43 | 3136533 DeadFred
DeadFred's picture

I expect new highs before the March Madness (not basketball) starts but the wildcard is the off-chance that the credit agencies actually do their job, slim chance but possible.

Wed, 01/09/2013 - 12:46 | 3136799 Thisson
Thisson's picture

There is no chance of any downgrade that will have a material impact.  They may do a token downgrade, but they're never going to give a below investment grade rating until AFTER a crash has already happened.

Wed, 01/09/2013 - 11:22 | 3136408 buzzsaw99
buzzsaw99's picture

Ackman and Tilson were just asking to get reamed when they publicly announced short positions which constituted a large percentage of the float in this freaking market. Swimming the barrier reef with a t-bone steak tied around your neck would be safer imo.

Wed, 01/09/2013 - 13:30 | 3136962 Freddie
Freddie's picture

I am not sure if Tilson as a person is a prick but Ackman sure seems to be a pirate arsehole.

Wed, 01/09/2013 - 11:22 | 3136410 kaa1016
kaa1016's picture

I give it to you guys, you called this one. Let's see what happens from here.

Wed, 01/09/2013 - 11:22 | 3136412 firstdivision
firstdivision's picture

FB up on amazing expectaions for earnings, coming from people that are trying to sell you the stock.

Wed, 01/09/2013 - 11:25 | 3136427 The Axe
The Axe's picture

Ha ha YOu got that right    with humor  too!!!!!!

Wed, 01/09/2013 - 11:30 | 3136432 NoDebt
NoDebt's picture

I thought Whitney Houston died a while back?

Huh?  Oh, Tilson, not Houston.  Got it. 

Same difference in this case, I guess.

Wed, 01/09/2013 - 11:51 | 3136570 Dr Benway
Dr Benway's picture

They're both cracked out and underwater

Wed, 01/09/2013 - 11:28 | 3136442 monopoly
monopoly's picture

Broken markets, broken country.

Wed, 01/09/2013 - 11:39 | 3136509 Water Is Wet
Water Is Wet's picture

IMO, America ended.  This is no longer a republic; capitalism is dead.  I don't know what to call it now, but it's not America.

Wed, 01/09/2013 - 11:30 | 3136455 bnbdnb
bnbdnb's picture

Why does a stock go up when too many shorts are added? Whats the financial reason?

Wed, 01/09/2013 - 11:31 | 3136458 jcaz
jcaz's picture

LOL-  Whitney is on a train to Juarez right now.....  

Like all great short fiascos-  right in premise, but such a fine line between clever and stupid when you start yapping on CNBC about it.......

Wed, 01/09/2013 - 11:35 | 3136478 MillionDollarBoner_
MillionDollarBoner_'s picture

O/T - Electronic Tags on Innocent Kids

Any fellow ZHs know anything about this?

http://www.bbc.co.uk/news/technology-20957587

Looks like the start of a slippery slope to me.

Next pre-school kids "for their protection"; then adults "Sir, why wouldn't you want us to know where you are? What have you got to hide?" etc.

This seems like a big issue which is as yet under the radar.

Wed, 01/09/2013 - 12:29 | 3136719 Joe Davola
Joe Davola's picture

Wonder if she has a smartphone...

Wed, 01/09/2013 - 11:38 | 3136500 haskelslocal
haskelslocal's picture

Tilson needs suckers.

Could it be he shroted At Akerman's Note and began to buy to cover at the point he released the sell note?   

Wed, 01/09/2013 - 12:30 | 3136715 SilverDOG
SilverDOG's picture

Does she?

 

 "..Whitney Tilson, who may well be on track to blow.."

 

Me thinks she sucks.

Wed, 01/09/2013 - 11:41 | 3136518 Pedantic Rube
Pedantic Rube's picture

This all ends in tears for Bill. How does he get out when he's short 25% of the float!! People forget he was wrong about MBIA in 02. I've been hearing a lot more "Yackman" hating. How do you have $9bn AUM and risk putting 20% of your firm in 1 short! What happens when redemptions start pouring in?

Wed, 01/09/2013 - 12:28 | 3136711 retiringteach
retiringteach's picture

you and all the other zh pretenders--critize ackman??-what's your net worth? one millionth his? pretender!

Wed, 01/09/2013 - 12:50 | 3136814 Thisson
Thisson's picture

Right is right, whether his/her bank balance is 0 or a trillion. 

Wed, 01/09/2013 - 12:03 | 3136607 I am a Man I am...
I am a Man I am Forty's picture

I told everyone to buy NUS as 33

 

And TD:  You did make a great call on this one, may be your best ever.

Wed, 01/09/2013 - 12:15 | 3136661 Kreditanstalt
Kreditanstalt's picture

Er...beg pardon, but what is "Herbalife"?

What does it produce? 

Wed, 01/09/2013 - 12:23 | 3136688 TheAlchemist
TheAlchemist's picture

http://www.herbalife.com/

 

About Herbalife

We are a global nutrition company that has helped people pursue a healthy, active life since 1980. Our nutritionweight-management and personal care products are available exclusively through dedicated independent Distributors in more than 80 countries.

We support the Herbalife Family Foundation (HFF) and its Casa Herbalife program to help bring good nutrition to children in need. We also sponsor world-class athletes, teams and events around the globe, including the LA Galaxy and FC Barcelona soccer clubs, as well as champions in more than 15 other sports.

Our Mission is to change people’s lives by providing the best business opportunity in direct selling and the best nutrition and weight-management products in the world.

Wed, 01/09/2013 - 12:54 | 3136821 Thisson
Thisson's picture

Sure looks like snakeoil, doesn't it?

 

Wed, 01/09/2013 - 13:05 | 3136863 Kreditanstalt
Kreditanstalt's picture

How American!   Produces NOTHING, merely repackages, "markets" and "distributes".  Didn't these used to be called "pyramid schemes"?   This is why there's no real economic growth: any entity "investing" in this outfit is merely piggybacking on someone, somewhere, who actually - far, far down the line - allegedly produces some "nutritional product".  And others are no doubt deep into options, puts and calls, and dividends - again, PRODUCING nothing.  And some are still shorting.  All are leveraged, using borrowed money. 

Where's the production of WEALTH?

Wed, 01/09/2013 - 12:19 | 3136677 BlueStreet
BlueStreet's picture

"...Bill Ackman buddy Dan Loeb..."

 

Maybe not so much anymore. 

Wed, 01/09/2013 - 12:25 | 3136700 Joe Davola
Joe Davola's picture

Cue Baghdad Bob:  We are pummelling them!

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