Herbalife has been quite the "battleground stock" of 2013, all but reviving financial tv from impending doom (or at least delaying it), and reinvigorating the markets to an otherwise boring and dull market environment.
Yet few talk about how to monetize on Herbalife. We largely believe this is for good reason. How can one get an edge, after all? Titans of Wall Street, such as Third Point, Icahn Partners, Pershing Square, etc. are involved in an epic battle royale.
Gotham City Research is currently on the sidelines with respect to HLF, but we are able, ready, and willing to make a big bet if a certain set of events occur.
The only event in which to make ANY bet, in our view, is if and only if we see the proverbial "blood on the street". We won't elaborate beyond that, but to savvy market participants, it should be obvious.
And just because it's obvious to the smarter market participants doesn't mean it will be discounted in the future; to the contrary, to exhilarating trading dynamics, and price velocity, will render all market participants fearful to take on this trade... it will have an 'ick' factor, to borrow from a certain Michael Burry.
And that is why that trade will succeed. But it may never happen, so we at Gotham City Research will wait, for now...
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.