Seeking Alpha
View as an RSS Feed

Ilir Shkurti  

View Ilir Shkurti's Comments BY TICKER:
Latest  |  Highest rated
  • Herbalife: Do Not Expect A Short Squeeze [View article]
    I take that back. Ran some numbers, weighted the volumes and price from tapes from Jan31-12 to Jan31-13 and I get the following range from best to worst: $54.61 to $41.17. Best assumes he borrowed at the top of volume (each incremental short belonging to him until 20M shares). Worst case assumes he shorted at the bottom (last 20M incremental shares through Dec31). Base case is much closer to best than worst, as he would not have announced without having gotten some pretty good cost. Pretty pointless exercise, but flexed my statistical muscle.
    Feb 19, 2013. 10:13 PM | 3 Likes Like |Link to Comment
  • Herbalife: Do Not Expect A Short Squeeze [View article]
    The $50/share average cost for Ackman is somewhat dubious. Based on the distribution of the Nasdaq-reported short interest, I have an inkling his cost base is more likely closer to $45 than $50. I know the latter fits the math of two numbers taken for granted in the media: $1 billion and 20 million shares. I believe one of these has just been assumed. His reported portion is too large to have averaged $50. He would have had to have been the only short in the market way before the Einhorn episode to have achieved that short.
    Feb 19, 2013. 09:03 PM | 2 Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    In the mean time, earnings will be out today.
    Feb 19, 2013. 07:44 AM | Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    I am simply guessing here, but his counterparty on both calls and puts are the same (likely well-heeled brokers, banks he does business with). When your last name is Icahn, first name Carl and you have the money that goes with both, margin will not be a problem, neither will the financing rate. You can bet your bottom dollar his broker is well hedged here.
    Feb 18, 2013. 05:00 PM | 2 Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    That is a valid point, and you apparently have the trades to back it up. December 24 was a feast for HLF bulls who had waited. However do not get fooled. In my view, HLF is not done revisiting the downside. It is very easy to pick sides. Icahn is the clear winner in the public opinion. Be wary of the fury of Ackman scorned. He may be playing with other people's money, but as Robert Chapman put it, he has a healthy rolodex with federal and state regulators. He only needs one to be involved, and the news cycle will once-again turn. Icahn is by far in the more comfortable position, trading his own (substantially larger) capital. Read "Confidence Game", folks. Ackman is a man with a mission.
    Feb 18, 2013. 04:15 PM | 1 Like Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    That was an epic battle. But Ferdinand Piech eventually ended up winning, and quite literally ended up "owning" Porsche.
    Feb 18, 2013. 02:06 PM | Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    All:

    This sentence in my article above is clearly not a well-thought one: "What the put strategy means for Icahn is that should shares go down to a level where his put would be called away, he would need to exercise his calls to fulfill the put obligation." Puts being called away would give Icahn ownership of shares and calls would simply expire worthless, simply adding some to his loss on the position (which at this time would equal exercise price minus market price minus call premium plus put premium). Kudos to several of you who caught it. More kudos by pointing out without lashing out offenses to my clearly-inadequate option knowledge. Cheers all!
    Feb 18, 2013. 01:16 PM | 1 Like Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    For all we know, his 12.98% stake as of February 14th got bigger on Feb 15, and may keep expanding on Tuesday Feb19 and onward. He may have started this trade for spite or not, but he clearly is not bluffing, and has a plan.
    Feb 18, 2013. 01:12 PM | 2 Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    Correct - please read my reply to SlimJim2005007 above.
    Feb 18, 2013. 01:11 PM | 1 Like Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    Correct, he said so during last Friday's talk with Wapner on CNBC. This explains his synthetic current exposure, and may well explain his "quiet" period between Christmas and January 25th.
    Feb 18, 2013. 01:10 PM | 1 Like Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    Correct. Please read comment above in reply to Manku.
    Feb 18, 2013. 01:08 PM | Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    Read my reply above. In addition, I do not believe he is "long" twice on HLF. If stock falls, he loses premium paid on calls, and the spread between exercise price and actual market price less premium charged. So there is no double exposure, just a synthetic long stock exposure, ie the no-wiggle room I note above. Thanks for keeping me honest.
    Feb 18, 2013. 01:08 PM | Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    You are correct on the incongruence. My language is incorrect. What I should have stuck with is that long calls and short puts effectively give Icahn a synthetic long stock exposure. Whatever way stock goes, he is on the hook. Therefore, his option play does not give him wiggle room to bail.
    Feb 18, 2013. 01:06 PM | Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    SEC may well want to pitch in through some sort of manner given that these are two high-influence individuals (Icahn, Ackman) publicly talking their book, and dragging the stock up and down.
    Feb 18, 2013. 12:51 PM | Likes Like |Link to Comment
  • Dissecting The Herbalife Trade: Did Spite Motivate Icahn's 13% Stake? [View article]
    Great comments, all.

    Regarding the options trade. As far as I understand, the puts and calls are "married" (option experts forgive me, I use the "term" as a civilian, not necessarily in the sense "marriage" applies to actual option setups). The filing language indicated that his short European puts were exercisable at the earlier or their expiration or exercise of offsetting American calls.
    Feb 18, 2013. 12:50 PM | Likes Like |Link to Comment
COMMENTS STATS
24 Comments
13 Likes