As we warned on December 26 [7], when the stock was trading in the mid 20's the pain for shorts is horrible and getting worse [7] (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.
[8]
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.
[9]