Icahn wasted exactly zero time to take advantage of Herbalife's board expansion last week [2] which gave him permission to build up his HLF stake to 25%.
Moments ago the billionaire corporate raider just announced the purchase of another 2 million shares of HLF stock, taking his total to 16 million shares, or 15.5% of the company, up from 13.6% previously. Scarier for the shorts is that unlike before, Icahn is no longer pussyfooting with costless collars and is buying the shares outright at a blended cost somewhere in the upper $40/share range. The end game here is now very clear: build up a sufficient stake in the company to where the the shorts outstanding are greater than the open float, at which point the stock borrow is pulled creating an epic squeeze, just as we predicted would happen back in December.
What is tangentially quite amazing is that according to the just filed 13-D, Icahn bought nearly 2% of the company in three short trading days, and without moving the price materially. In fact, of today's entire 4.1 million share volume, Icahn's bid-side VWAP algo was responsible for a stunning 1.5 million shares, or 36% of the total.
What spurred the buying surge? Who knows, but perhaps the recent epic collapse in Icahn's other infamous position, his JCP long which is imploding day after day, Icahn decided to hep out with the margin call. Who knows - perhaps Icahn is even short JCP. Of course, the reason he is a multi-billionaire is that unlike Ackman, he will not tell anyone until he is out of the position.
[3]
Will Icahn continue buying HLF every day? You bet: the moral of the story then and now: you don't piss off a multi-billionaire on primetime TV whose only thought afterwards is how to piss on your grave as fast as possible.
and here's how the algos can push that much new flow through a stock and hardly budge the price close-to-close - still convinced of the money-on-the-sidelines argument?
[4]
And remember:
That Icahn is out there. He can't be bargained with. He can't be reasoned with. He doesn't feel pity, or remorse, or fear. And he absolutely will not stop, ever, until Ackman is destroyed.
Behold: the Icahnator
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