Herbalife Soars As Icahn Goes Medieval On Ackman, Reports 12.98% Stake In The Company

Tyler Durden's picture

Remember when Bill Ackman told Icahn on CNBC he should tender for the company (to a less than favorable reply)? Well, Icahn may have done just that: moments ago the belligerent billionaire just reported a 12.98% stake in Herbalife, adding that he intends "to have discussions with management of the Issuer regarding the business and strategic alternatives to enhance shareholder value, such as a recapitalization or a going-private transaction." Needless to say, the stock soars, and it remains to be seen if the epic short squeeze that we predicted, and that Icahn confirmed on TV could happen if there is not enough float to satisfy all the shorts, will be next. Volkswagen anyone?

From the 13D just filed.

The Reporting Persons may be deemed to be the beneficial owner of, in the aggregate, 14,015,151   Shares (including Shares underlying call options). The aggregate purchase price of the Shares and call options purchased by the Reporting Persons collectively was approximately $214.1 million (including commissions and premiums). The source of funding for these Shares and call options was the general working capital of the respective purchasers. The Shares and call options are held by the Reporting Persons in margin accounts together with other securities. Such margin accounts may from time to time have debit balances. Part of the purchase price of the Shares and call options was obtained through margin borrowing.

 

The Reporting Persons have conducted significant analysis with respect to the Issuer.  The Reporting Persons have concluded that the Company has a legitimate business model, with favorable long-term opportunities for growth.  The Reporting Persons intend to have discussions with management of the Issuer regarding the business and strategic alternatives to enhance shareholder value, such as a recapitalization or a going-private transaction.

 

The Reporting Persons acquired the Shares in the belief that the Shares were undervalued. The  Reporting  Persons may, from time to time and at  any time: (i) acquire additional  Shares  and/or  other  equity,  debt,  notes,  instruments  or other securities  (collectively,  "Securities")  of  the  Issuer (or its affiliates) in the open market or otherwise;  (ii) dispose of any or all of their Securities in the open market or otherwise;  or  (iii) engage in any hedging or similar transactions with respect to  the  Securities.

As a reminder, this is what we said on January 2:

With the price virtually screaming for an epic short squeeze, is management, in consultation with its recently hired financial and legal advisors, contemplating a Volkswagen like short squeeze, where it conceives a transaction whereby there are simply not enough shares in the free float to satisfy the short interest. This could be facilitated especially if the firm's institutional shareholders, chief among them Fidelity with 15% of the shares outstanding, were to pull their borrow (and one wonders just where Fidelity's fiduciary responsibility lies if it allowed Ackman to put on a 20 million share short, at least according to him, a trade that could only be enacted if Fidelity allowed him to borrow its shares to short the stock against Fidelity's long holdings), on top of a leveraged stock buyback or even MBO.

 

In short- could HLF, with 24% of its stock short, and where institutions control more than 76% of the shares outstanding, become the next Volkswagen squeeze play, and send the stock soaring far higher than ever before, in the process destroying Ackman (assuming he has still not covered his short), Tilson, and anyone else still short the name?

Herbalife stock after hours:

HLF's short interest was 32.3% of the float at last check: if only the remaining long institutions decide to pull the borrow, the shorts will have one very big headache:

And here is what HLF shorts have to look forward to if HLF is indeed the next Volkswagen:

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localsavage's picture

That is the ultimate in calling someone a fuck face

redpill's picture

I hope Ackerman gets squeezed out and then the company implodes so they both lose their ass. Cockfucks.

flacon's picture

Stock Market = 5 or 6 players: ICHANN, ACHMANN, BUFFET, JON KERRY, BERNANKE, 401(K). 

 

Who farted on silver today? Yeah it was you BERNANKE/BLYTHE, go fuck yourself! 

TruthInSunshine's picture

There's zero doubt in my mind these are the most broken, irrational, completely FUBAR'd markets seen in my lifetime, far exceeding the batshit crazy '97-'99 era dot.com bubble or the 2002 to 2007 housing/real estate bubble COMBINED.

I know that the markets are headed for a gigantic, crushing fall, since I know that there's not a central bank "put" that can indefinitely postpone reality, but the icing  on the cake (of seeing the Wall Street Ponzi burn any remaining shreds of faith some Muppets may still yet have in that goried institution) would be to see a real prick like Icahn lose his ass on a bet he made simply because he can't check his dickish ego at the door.

ZippyBananaPants's picture

Just in time for the SEC to announce something tomorrow mid-day!  then back to 25

Cult_of_Reason's picture

I am going to buy deep out-of-the-money puts tomorrow.

TuesdayBen's picture

So MDB may soon be reporting to Icahn

Cult_of_Reason's picture

The FTC is investigating MLMs and HLF.

Most likely Icahn will get his irrational and emotional head handed to him.

Karlus's picture

Maybe, but by the time FTC catches up, it may be over. This also seems to be a bit personal and going all in on Poker. Achman made his play hoping that his trash talking could mortally wound the stock. But the blood in the water attracted some sharks.

If I can see you before you see me fight is over. If you see me first, fight is over too, but I'm whats for dinner instead so slightly different outcome.

Achman ran through the quiet woods wearing bright orange with his hair on fire blowing an airhorn. He seems to be seen first.

"Never confuse making money with doing the right thing." - My first boss on Wall St

James_Cole's picture

"The FTC is investigating MLMs and HLF.

Most likely Icahn will get his irrational and emotional head handed to him."

No way, one thing that should make you seriously reconsider OTM puts is this simple fact: 76% institutional ownership + epic short squeeze.

Watch Ack's full presentation too, his legal case is flimsy - mostly he relies on comparisons to other MLMs. Sure, HLF is OBVIOUSLY a pyramid scheme to anyone with a brain but that does't mean a whole lot. Seems extremely dangerous to go short HLF right now.

If you wanna go short one of Icahn's positions NFLX seems to make a lot more sense. Icahn has already made his $ on it, his calls exp in the fall, NFLX is in disasterous financial shape yet saw a 100% move up in the past month (most of it over a couple days due to tiny beat). It also looks like their EPS will miss next quarter even if they beat on subscribers too. 

Marco's picture

Volkswagen only happened because the affected hedgefunds forgot for a moment they weren't dealing in a market controlled by US regulators ... something similar is not going to happen in the US.

In my opinion for the worse, uncovered shorting might be good for price discovery but the risk of getting cornered is good for keeping the shorts honest (borrowing shares with an absolute obligation to return them is no cover of course).

Againstthelie's picture

You obviously have not read the brilliant analysis of Herbalife that Ackman made public.

IMO it is a obvious pyramid scheme with no-name commodity products. The facts are clear.

But on the other hand this doesn't necessarily mean, that the truth with prevail...

redpill's picture

Of course it's a pyramid scheme, but you're betting that people won't be stupid, and in this world that's a dangerous wager.

RockyRacoon's picture

...and on that note (which I agree with) I'll go back to the main page and find some REAL news.  Two rich brats throwing turds at each other is not really what will keep me secure tomorrow.  If I'm lucky, things will get worse much faster and we can get on to a real recovery.

alpha60's picture

plenty of pyramid schemes provide yield. infrastructure master partnerships for instance.  

Anarcho Capitalist's picture

"You obviously have not read the brilliant analysis of Herbalife that Ackman made public.

IMO it is a obvious pyramid scheme with no-name commodity products. The facts are clear."

 

Isn't Social Security an obvious pyramid scheme or the entire Federal Government for that matter??..... Sheep are bullish pyramid scheme's

TruthInSunshine's picture

Social Security is a Pyramid Scheme, but not in the same way that Herbalife "Get People To Sell Worthless Garbage To Family & Friends & Invoke Pity & Guilt If You Have To-- Like Girl Scout Cookies, But For Adults" is.

Squid Vicious's picture

Who died and made Ackman the arbiter of global fairness and ethical business practices? what a self-serving little prick... Icahn is even more disgusting, too bad one of them has to win...

Mark123's picture

that would be nice, but I'll bet both these guys have it structured so that they have no skin in the game.  Lots of posturing, and side bets that skim money from the sheeple.

What a pathetic joke this whole system has become....it's like the whole western world is nothing more that a guy in a cheap, ill-fitting suit trying to convince me to sign up as a rep to sell Tupperware.

 

Where is mother nature when you need a good virulent plague that will leave all the major cities empty so we can start all over.

 

Karlus's picture

Look, I dont know Ackman or really his tactics. You might be suprised if he says one thing and does another.

Would you freak out if he covered weeks ago and is long?

Could he an Carl be playing the Rosie vs Trump game (carefully orchestrated throught underlings) ?

Achman does not strike me as a dumb guy. This maybe a net designed to catch some small fishies between two whales?

dark pools of soros's picture

Just use as much oil as you can.. The sooner we run out, the sooner you get your wish

fomcy's picture

Speaking about SEC??? Ackerman, what a cockroach? Take short position first and then start calling names and shots? This "innocent" Jew should get 10 years to think about it behind bars at least.. Can you imaging how many Joe Six-packs lost their pants that day, because some jerk thinks whatever he thinks? There is no wrong doing on what he thinks, but accusing on air and making a statements after taking a position in the stock? Arsemanhole should be in jail and separated from his extra money (no matter if he's right or wrong), if he doesn't know how to keep his mouth shut. Ackerman Dick, I which HLF goes to 100$ now so you lose your easy money, Jackass.

P.S And no, I never invest in HLF and have nothing to do with their organization, but my family using their product, like shampoo for example which is very high quality and little above average price.. HLF product is good, seriously.. F*ck Ackerman

SilverMoneyBags's picture

Exactly, this would be hilarious if Ichan loses his ass too. Egotistic assholes.

Zap Powerz's picture

Herbalife: proving yet again that there are millions of suckers born every minute.

fomcy's picture

They both shouldn't be using publicly trading company
for their personal agenda. Those stock swings are enormous.
Both Jews should be fined by amount equivalent to their investment..
It's like a Wall Street zoo. What SEC? helllllloo.. Anybody out there???

SoundMoney45's picture

Two useless parasites fighting.  Can't we just put them in a Roman arena and let them go at it just to entertain the masses?

CClarity's picture

Saber wars - or prick tease?

Ness.'s picture

My dad would refer to this as on 'old school pissing contest'.

 

Round 1 - Icahn

jcaz's picture

Carl wins this one- he'll bet his last dime on this deal, he doesn't care if he goes tit-up at his age-  and he knows Bill does.

Ultimate poker.

kliguy38's picture

Precisely, never swim in a pool of sharks if you aren't the biggest and baddest.....there's blood in this pool now and it ain't Carl's

Seasmoke's picture

i am betting on the Jew

Freddie's picture

Tyler - not all of us are folling the story.  Is Ackman short?  I thought he was. 

Icahn is no prize but Ackman is a jerk off.

Everybodys All American's picture

Ackman is short and Icahn has been long and getting longer. The pissing contest between the two has apparently a history which goes back over the years on some other pissing contest. The company over which I don't know but once again they had opposing stakes. Icahn has been itching for a fight with Ackman apparently ever since and it's over Herbalife for which most speculate the bad blood goes back to that original battle. Now it has become who can be a bigger asshole.

otto skorzeny's picture

what does this company sell?weed?

Eally Ucked's picture

Nobody knows but it's good for you!

chump666's picture

Close, but try Snake Oil.

It's crappy junk heap, I hope these rich greedy a-holes that bought in namely Icahn get taken out by the other rich a-hole.

Devour.

fredquimby's picture

what does this company sell?weed?

Nah, thats $MJNA, $HEMP, $GRNH, $PHOT and $CBIS

 

buzzsaw99's picture

You have the ring, and I see your Schwartz is as big as mine. Now let's see how well you handle it.

rqb1's picture

I like Ackman, his work on ggp was spectacular,  never followed in the jcp or herb ideas though.

astoriajoe's picture

I thought it was pretty funny when Icahn bought CVI energy last year, planning to sell it to some other refiner.

So he fires the board, replaces them with a slate with virtually no industry experience, and then no one wants to buy the company.

Good luck Carl!

francis_sawyer's picture

As I said a few days ago... The only thing capable of ensuing more hilarity than 'Jew vs. Goy', is 'Jew vs. Jew'...

buzzsaw99's picture

Two jooz enter, one joo leaves. [/beyond hilarious]

Karlus's picture

Wait, is that break a deal, face the wheel? Or oven (off color humor)

In b4 the minus I clearly earned with this :)

LasVegasDave's picture

How's it feel FRANCIS, to know you will NEVER be in their league

and are just an insignificant LOSER typing in anonymity, while those two YIDS battle it out in the REAL WORLD

Fuck you scumbag

buzzsaw99's picture

set the hook francis, he took the joo-bait. joo be doobie doo... roflmao

Manipuflation's picture

Agreed, I am going to go make some popcorn for this.lol