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Herbalife Short Interest Explodes In Last Week Of 2012

Tyler Durden's picture


Three weeks ago, when we suggested, correctly, that Whitney Tilson's involvement in the Herbalife theater was the absolutely infallible "contrarian buy" signal, as the only logical next step was a short squeeze, we were amazed by the rapid rise in HLF short interest heading into the last reported data point, which saw total HLF shares shorted surge from 20 to some 26 million in the span of two weeks December 14. That, in itself, was sufficient grounds for us to sit back and expect some potential corporate finance transaction which saw the company buy back a portion of its stock, and with the remainder of the float held by long hands, we somewhat jokingly were expecting a Volkwsagen-like event to grip the company with shorts scrambling to cover at any price should suddenly there not be enough shares in the float to cover the shares short as a % of float which was at ~25%.

Well, over the weekend the NYSE reported the latest short interest in the stock as of December 31, or even as the stock had starting ramping higher.

To our absolute shock, dismay, and not to mention delight, the new number of shorts reported soared to a mindblowing 37.3 million shares outstanding, or 35.2% of the total float, an increase of 11 million shares in one week, or 42%!

In other words, the probability for an astronomic jump in the stock should the company indeed announce a buyback as Charlie Gasparino hinted moments ago, has just increased drastically, especially since it appears that Ackman, who is now likely underwater on his blended cost basis, has covered little if any of his bets.

To summarize: thank you Whitney Tilson for suggesting the best performing idea of 2013 so far, even if it means you may have blown up yet another fund in under 12 months.

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Mon, 01/14/2013 - 15:04 | 3151626 DrDinkus
DrDinkus's picture

i'll get this started....BOCK YOU BERNANKE!

Mon, 01/14/2013 - 15:38 | 3151775 Kitler
Kitler's picture

HerbaDeath free money in 3... 2... 1...

Mon, 01/14/2013 - 15:05 | 3151631 lolmao500
lolmao500's picture

So what you're saying is... BUY BUY BUY?

Mon, 01/14/2013 - 15:08 | 3151638 CPL
CPL's picture

When Whitney speaks, do the direct opposite of what falls from his lips.


So short short short.  Or Unbuy someone else's shares and hand them back a pile of worthless paper.

Mon, 01/14/2013 - 15:41 | 3151780 michiganmaven
michiganmaven's picture

I thought he went short and not long... I thought he joined Ackman on the short side.... could be wrong though... but yes do the OPPOSITE of Whitney and Stolper...

Mon, 01/14/2013 - 15:52 | 3151819 CPL
CPL's picture

It's got a bit more rope to run first though then watch the drop.  Dead cat bounce patterns never change even in twisted financial environments.

Mon, 01/14/2013 - 16:14 | 3151883 James_Cole
James_Cole's picture

Yes, it's a BUY. HLF is rumoured to do a major share buyback. Doesn't really matter if Ackman is right, big short squeeze. 

Mon, 01/14/2013 - 18:21 | 3152305 NaiLib
NaiLib's picture

Let the squeeze come! Ill be waiting for ya up in the stratosphere. Might result in the grand "inflection point" of the year;

Mon, 01/14/2013 - 16:21 | 3151895 formadesika3
formadesika3's picture

b-b-b-but MDB said he just became a Herbalife distributor on the Obummer transcript thread...

I'm so confused.

Mon, 01/14/2013 - 15:12 | 3151639 hedgeless_horseman
hedgeless_horseman's picture



...we somewhat jokingly were expecting a Volkwsagen-like event to grip the company with shorts scrambling to cover at any price should suddenly there not be enough shares in the float to cover the shares short as a % of float which was at ~25%.

Which is similar to why no-limit poker is so much more exciting...you can raise until the other guy is out of chips.

Mon, 01/14/2013 - 15:17 | 3151683 SolidSnake961
SolidSnake961's picture

anti-tilson etf.....the gift that keeps on giving

Mon, 01/14/2013 - 15:31 | 3151750 monopoly
monopoly's picture

And they call these "markets". What a farce.

Mon, 01/14/2013 - 15:41 | 3151767 Kitler
Kitler's picture

Nice bait but watchout for an engineered short squeeze.

Tue, 01/15/2013 - 00:41 | 3153257 Colonel Klink
Colonel Klink's picture

Yep!  You jaded bastard, but we've all seen this game before.

Mon, 01/14/2013 - 20:26 | 3152637 I am a Man I am...
I am a Man I am Forty's picture

ZH's number one best call since I've been around.  Nice work.

Mon, 01/14/2013 - 23:13 | 3153036 secret_sam
secret_sam's picture

Why they can't just print more shares to add to the float?  Like dollars or GLD?!?!?

Tue, 01/15/2013 - 07:45 | 3153554 Papasmurf
Papasmurf's picture

Call for delivery when short interest reaches 120% of issued shares.

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