Market Currents
Following Herbalife's (HLF) 20% plunge, D.A. Davidson's Tim Rainey agrees with the company that...
-
Tuesday, May 1, 2012, 5:45 PM ETFollowing Herbalife's (HLF) 20% plunge, D.A. Davidson's Tim Rainey agrees with the company that the selloff creates a buying opportunity, dismissing David Einhorn's probing: "If anyone else had asked the question, we would have wondered why time was being devoted to such basic inquiries... This was an excellent quarter from an excellent company with high ethics and strong accounting."
Other date
Latest Consumer Articles
This news story has 5 comments:
Here is the silly minimal version of the trade: company announces earnings, stock doesn’t move much. There’s a call at 11am. You short the stock. You get on the call. You ask questions like “why are you no longer disclosing what you used to disclose?” The company answers “because it’s not helpful.” You’re all “thanks.” You hang up. The stock drops 20%.
The company announces it’s a buying opportunity and they have a $428mm share repurchase authorization. You … go sell back to them the next morning. 24 hours, 20% profit.
There are obviously some necessary conditions here. The tone of your voice in asking those questions is crucial. It sure helps if the company is … umm … let’s say, a network marketer of weight loss pills. It is critical that you be a famous short seller with a good track record of getting short calls correct.