Just hours after Ackman announced his joining Einhorn's alleged Herbalife short, we jokingly tweeted our expectation of bandwagon-following 'value' investors imminent herding...
Ackman joins Einhorn in the HLF short. Next up: Titney Wilson— zerohedge (@zerohedge) December 19, 2012
And sure enough, with the holidays providing just enough time to read the 300 pages and to form his own "blindingly obvious" conclusion, Whitney Tilson has jumped in short HLF. We can only imagine the cost of borrow and wonder on the post-OPEX timing of a short squeeze given the huge short interest and the fact that HLF has recently hired Boies, Schiller, and Flexner to defend its business model. HLF is trading up 2% in pre-market.
One has to wonder what price Tilson sold at?
Via Whitney Tilson:
Merry Christmas to all!
ershing Square’s analysis of Herbalife is the most remarkable piece of investment analysis I have ever seen. Simply astonishing. And kudos to Pershing Square for making all of it public – not just the 300+ page slide presentation, but all the supporting materials. For the many young people on this email list who are looking for a job in this industry, study this carefully – if you can do analysis even a tiny fraction this comprehensive, there will always be a job for you...
Hopefully it results in massive reform of this whole sector, which has preyed upon MILLIONS of vulnerable people all over the world for decades. This has been blindingly obvious to anyone who’s done even cursory analysis, but for some reason regulators at the state and local level have done almost nothing to rein in the widespread abuses – it’s just like subprime mortgages and student lending. This is one area in which China is WAY ahead of us: it’s simply outlawed ALL multi-level marketing – a very good idea in my opinion...
Disclosure: I am short a tiny smidge of HLF (good luck getting the borrow) and a number of other multi-level marketers.
And elsewhere, via WSJ, we are getting ever louder rumblings of either legal action, or simplest, an MBO or a levered dividend or stock buyback (perhaps why Moelis was hired previously), which would have some rather unpleasant consequences on the P&L of shorters.
Herbalife Ltd., the nutritional-supplement maker under attack by investor William Ackman, is working with law firm Boies, Schiller & Flexner LLP in connection with the tussle, according to people familiar with the matter.
Mr. Ackman last week revealed that he has been betting against Herbalife shares for months, in a negative wager that he characterized as “enormous.”