Herbalife trades higher as Ackman underwhelms


After trading lower by as much as 2.4% during Bill Ackman's presentation at the Robin Hood Investors Conference, Herbalife (HLF +2.9%) moves immediately into positive territory after the Pershing Square chief leaves the stage.

Although Ackman raised familiar questions and concerns, investors weren't impressed.

With buyback and LBO rumors circulating, the bar for what counts as "bad news" for the shares has been ratcheted ever-higher over the past several months.

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Comments (54)
  • wcz83
    , contributor
    Comments (191) | Send Message
     
    Ackman lost as much as $500m on HLF short
    22 Nov 2013, 10:04 AM Reply Like
  • Tales From The Future
    , contributor
    Comments (7608) | Send Message
     
    These are paper losses so far until there's a buyout or he is forced to close his shorts.
    22 Nov 2013, 10:25 AM Reply Like
  • Andrew Williams
    , contributor
    Comments (347) | Send Message
     
    I believe Ackman when he says he covered 40% of his position at $72.13.

     

    Anyway, Pershing paid bonuses and earned fees on HLF's gains in 2012.

     

    HLF began the current fiscal year around $31and is currently trading over $72. Perhaps HLF has reduced Pershing's 2013 P&L by $900 mm.

     

    Make sense?
    22 Nov 2013, 10:41 AM Reply Like
  • EnterUserName
    , contributor
    Comments (40) | Send Message
     
    Not for a fund. They operate on MTM. It is a real loss alright.
    22 Nov 2013, 12:05 PM Reply Like
  • jakeliss
    , contributor
    Comments (11) | Send Message
     
    MTM does not make a paper loss a real loss. Your brokerage account is also MTM!
    22 Nov 2013, 01:55 PM Reply Like
  • nativist
    , contributor
    Comment (1) | Send Message
     
    Sorry, he really said that? I only saw part of his
    Bloomberg interview and I didn't hear that.
    22 Nov 2013, 03:57 PM Reply Like
  • Herbalifestudy
    , contributor
    Comments (301) | Send Message
     
    A bit interesting with the "paper losses" - did he cover 40% of his short or not in September? I believed he did when he "restructured" the short by buying back the shares and bought some long-dates puts instead. But perhaps he has not yet covered anything?

     

    It seems still a bit unclear exactly what he did to be honest?
    22 Nov 2013, 10:28 AM Reply Like
  • Yteeld
    , contributor
    Comments (1145) | Send Message
     
    Watched the interview on Bloomberg................

     

    This guy was definitely not cool and calm.....................
    22 Nov 2013, 10:28 AM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    not calm, but Rogier & Andrei still like his nice hair & suit
    22 Nov 2013, 10:43 AM Reply Like
  • Herbalifestudy
    , contributor
    Comments (301) | Send Message
     
    "This is not trade for ME, we're gonna take this to the end of the earth". (Bill Ackman, Bloomberg interview today Nov 22)

     

    Sounds like some emotions in there.
    22 Nov 2013, 10:41 AM Reply Like
  • Andrew Williams
    , contributor
    Comments (347) | Send Message
     
    This strikes as relatively unprofessional comment. Apparently he believes he can't be wrong. Even Buffett makes mistakes.
    22 Nov 2013, 10:48 AM Reply Like
  • Akmanscam
    , contributor
    Comments (2074) | Send Message
     
    As Ackman supposedly sold off 40% of his short position, that is not a paper loss, that is a real loss. It has been stated that Ackman has lost over $500 million.

     

    The Bloomberg reporter seems to be manhandling Ackman. He does not sound too sure of himself. Just rehashing the same nonsense over and over.

     

    The market has definitely written off Ackman and his misguided theories. Bottom line, Ackman is doing this for his own sake.

     

    Icahn has proven that he Ichan is the real Icon and Ackman is just a fool trying to make a name for himself.
    22 Nov 2013, 10:44 AM Reply Like
  • Herbalifestudy
    , contributor
    Comments (301) | Send Message
     
    from the Bloomberg interview today nov22

     

    Ackman: "we shorted it in the mid-high forties and I dont know where the stock is today but high sixties, a number like that? So we certainly lost money mark to market but we focus.."

     

    Reporter: "How much, how much"?

     

    Ackman: "Ehhm, you know, a lot of money.. 400-500 million dollars or something like that"
    22 Nov 2013, 10:52 AM Reply Like
  • Bioalchemy
    , contributor
    Comments (178) | Send Message
     
    I dont trust HLF's business, however Ackman's strike is not so impressing as well..
    22 Nov 2013, 11:02 AM Reply Like
  • pcincome
    , contributor
    Comments (2) | Send Message
     
    Why don't you trust HLF's business?
    22 Nov 2013, 05:21 PM Reply Like
  • pytiz
    , contributor
    Comments (323) | Send Message
     
    See you Matt Steward et al.
    22 Nov 2013, 11:38 AM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    "Hedge fund manager's veneer of legitimacy confuses Matt & shorts"
    22 Nov 2013, 08:53 PM Reply Like
  • JackBurton
    , contributor
    Comments (18) | Send Message
     
    Where is the hammer that Quoth the Raven was talking about? I don't think Ackman dropped anything but his investor's net worth.
    22 Nov 2013, 11:38 AM Reply Like
  • ninjahatori
    , contributor
    Comments (578) | Send Message
     
    Jack, not just any hammer QTR wrote dramatically about a hammer of 'Justice' . I guess the stock rally was a kind of reverse poetic justice !

     

    Why did the Ackman Camp leak news, that he was coming to Robin Hood with 600 slides of more crap,and whistleblowers and fire and brimstone. Such a Let Down . Poor[literally] Mart Stewart and Poor [literally] QTR have been mislead by their idol .

     

    Was it Mart who initiated fresh short positions ?Ouch .
    23 Nov 2013, 06:58 AM Reply Like
  • Akmanscam
    , contributor
    Comments (2074) | Send Message
     
    It looks like Ackman got hammered!
    10 Dec 2013, 07:48 PM Reply Like
  • Jharmstrong
    , contributor
    Comments (11) | Send Message
     
    I wouldn't touch HLF if you paid me, total scam.
    22 Nov 2013, 11:38 AM Reply Like
  • Mr toolman
    , contributor
    Comments (1366) | Send Message
     
    Your choice, but your statement that it is a total scam is just your opinion. We all have them and mine is that I have seen many people improve their health with strategies that have included HLF products.
    22 Nov 2013, 12:11 PM Reply Like
  • pcincome
    , contributor
    Comments (2) | Send Message
     
    Why do you say it's a scam?
    22 Nov 2013, 05:21 PM Reply Like
  • NeitherSide
    , contributor
    Comments (4) | Send Message
     
    We've watched HLF fluctuate up and down...hight to low to high and normalize for some time. However, from an accounting perspective and the argument surrounding how NuSkin recognizes revenue versus Herbalife, one has to wonder what's to be discovered in the audited financials. This is where the emphasis should shift being that there may be a possibility of going private. PwC represents both;therefore, PwC has to be very careful to be consistent. I would look to see how SAB104 comes into play.
    22 Nov 2013, 11:40 AM Reply Like
  • EARLPEARL
    , contributor
    Comments (217) | Send Message
     
    stiritz..soros..icahn.... are going to make hundreds of millions selling puts....the stock can not go down unless they want it to...it is that simple.....thousands of people follow soros..icahn..druckenm... and stiritz...a large percent of the followers have small amounts of hlf.....game was over several weeks ago.....i will not be surprised if its 150 bucks in 12 months and guess who will be selling puts all the way up...it will not be ackman....
    22 Nov 2013, 11:51 AM Reply Like
  • Kay Herbert
    , contributor
    Comments (1181) | Send Message
     
    It is kind of suspicious how the sp jumped before anyone even has seen Ackman's presentation. reeks of stock manipulation doesn't it? $150 sp in 12 months may be your prediction, mine is less than $10 in 12 months!
    22 Nov 2013, 12:56 PM Reply Like
  • Yteeld
    , contributor
    Comments (1145) | Send Message
     
    Please remember that you have been wrong numerous times ........

     

    Is this like a carnival game where you keep trying until you win the prize............

     

    Last time I checked emotions and investing do not mix...........
    22 Nov 2013, 02:31 PM Reply Like
  • JackBurton
    , contributor
    Comments (18) | Send Message
     
    No not really manipulation if the sp jumped before Ackman offered his opinions. Maybe the sp jumped because no one is taking Ackman serious anymore. I like how you seem to think that Ackman's presentation carries the same weight as disclosure by the company or a regulatory authority. Ackman is just a flesh and blood human being with no legal or governmental authority but don't tell Matt Stewart or QTR that.
    22 Nov 2013, 05:21 PM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    who leaked subject of HAckman presentation to NY Post before Peter Pan conference?
    HAckman is habitual manipulator. Can't call him "master manipulator" anymore--no one is listening to him!
    22 Nov 2013, 08:56 PM Reply Like
  • ninjahatori
    , contributor
    Comments (578) | Send Message
     
    Please remember how Ackman shorted Herbalife shares and THEN presented a negative, biased, understanding of its Business before the press , which crashed the stock pretty bad .If you're looking for a candidate for a stock manipulator ,it's your man Ackman . He started it , but he wont be ending it ! The experienced octogenarians will take over from him now , and give him an expensive lesson on stock manipulation and short squeezes .
    23 Nov 2013, 07:13 AM Reply Like
  • EARLPEARL
    , contributor
    Comments (217) | Send Message
     
    you need to buy a bunch of puts then...if it goes to 10 you can multiply your net worth by 20 times...but remember what jethro bodine said...20 times naught is naught
    23 Nov 2013, 10:18 AM Reply Like
  • Placebo Investment Advice
    , contributor
    Comments (4097) | Send Message
     
    "This is not trade for me, we're gonna take this to the end of the earth"

     

    Can someone tell me where I can piggyback on Ackman's bet on the end of the earth?
    22 Nov 2013, 02:04 PM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    after "the end of the earth" you fall off!
    22 Nov 2013, 08:57 PM Reply Like
  • ninjahatori
    , contributor
    Comments (578) | Send Message
     
    If Ackman was better educated , he would know the Earth is round and he's not going to see the end of it . No dearies, this is going to be a wild ride, round and round the merry go round , till Ackman gets dizzy and falls :)
    23 Nov 2013, 07:19 AM Reply Like
  • powershake
    , contributor
    Comments (2335) | Send Message
     
    Ackman is lonely voice in the wilderness. He manipulated the stock at the end Oct., saying he had "some news of substance against HLF." What happen to...Ackman to renew attack on Herbalife at Robin Hood conference? He LIED to everyone saying he had some BIG NEWS, instead reiterates same old unimpressive blah blah blah...

     

    Feel sorry for shorts who had high hopes for Ackman to deliver!
    22 Nov 2013, 02:12 PM Reply Like
  • rvn0
    , contributor
    Comments (137) | Send Message
     
    They have good products that I would use. But as to the success of their business structure it's suspect to say the least. I would not touch their stock with a 10 foot pole and don't tell me to get a 12 foot one.
    22 Nov 2013, 02:16 PM Reply Like
  • MK71
    , contributor
    Comments (136) | Send Message
     
    Cool or not. He did not seem to panic. despite those losses. playing down as 4-5% of 'his' capital. My take: he kept his cool.

     

    I do agree with him that this audit is a very interesting thing. It keeps me away from taking exposures. I wait for the audit.

     

    Interesting too: his remark about his opposition: all 80y+ billionnaires. Well they own more than he is short. Further what is this saying with the wise old men?
    22 Nov 2013, 04:22 PM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    @mk71, dude, which interview were you watching? "kept his cool?" Look at his hair, his twitchy mouth, his beady eyes,...
    Ackman Says He’ll Take Herbalife Bet to End of the Earth http://bloom.bg/1bIF2Z8 via @BloombergNews
    22 Nov 2013, 09:03 PM Reply Like
  • MK71
    , contributor
    Comments (136) | Send Message
     
    @taninvest; I am not a fan of Ackman. I have called him stupid before here on SA as I think it is utterly reckless to short 25% of a company AND then go out in public and brag about it. Especially with the number of enemies he has made under the superrich hedgies.
    So you have a guy who is half a billion in the minus with his enemies firing bullets at him. To be able to talk like this is given those circumstances a pretty decent performance.
    Nonetheless no new information despite the banter for three weeks; just some reiterations of old news; the content of the interview is highly disappointing and the market took it like that.
    And all his comments like the one you quoted: my goodness this gets weird. Suppose this LBO comes out at the 100 USD level Ackman mentioned. He needs to take the loss on his stock and puts. Another 500 Million down the drain. But hey; we then will pay 3-5% yearly for CDS's. If he still wants to have that 1 Billion profit the notional of the CDS goes above 2 Billion (1 Billion of losses plus 1 Billion of Profit plus the premium on the CDS's). For a company with not even listed debt out there! And then forking 100 Million per year over until the end of days or his death or his success whichever comes first. No wonder Soros asked for redemption of his Pershing Square money.
    23 Nov 2013, 09:46 AM Reply Like
  • EARLPEARL
    , contributor
    Comments (217) | Send Message
     
    those old billionares are going to make billions selling puts....look at the open interest in all the different months of pputs and what idiots are paying for them.... ......I would not be surprised if when this game ends that the old billionares make a lot more than they paid for there stock by selling puts......
    23 Nov 2013, 10:30 AM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    Agree! HAckman needed a lot of self-control to keep from jumping the interviewer a few times when she was digging the knife in about his losses on JCP & HLF, his lack of understanding of MLMs, his opposition by successful investors Icahn & Stiritz, ...
    23 Nov 2013, 10:43 AM Reply Like
  • Herbalifestudy
    , contributor
    Comments (301) | Send Message
     
    Taninvest, agree with you. My favourite part from the interview

     

    Ackman".. we will win long-term, pyramid schemes are just not sustainable"
    Reporter: "If you don't get killed first in the trade!"
    Ackman: "Stephanie, you know what, we can take care of ourselves, we are big boys"

     

    and scene.
    24 Nov 2013, 10:46 AM Reply Like
  • MK71
    , contributor
    Comments (136) | Send Message
     
    I wonder if those guys don't need to file if they are selling puts. Icahn clearly is in territory that if he makes changes to his position that he needs to file within like 10 days.
    26 Nov 2013, 04:55 AM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    One important exchange was when the reporter, Stephanie Ruhle, mentioned that her mom had a "garage full" of pots & pans from Pampered Chef (Warren Buffett's investment) and asked why Ackman wants to label her a "victim." Ackman admitted that he did not know much about Pampered Chef, or other MLM companies.
    How can you invest in a company without doing some basic research into the industry? HAckman shorted HLF based on 3rd-party research & has no understanding of the MLM business model or how other MLM companies operate compared to Herbalife!
    26 Nov 2013, 07:27 AM Reply Like
  • Akmanscam
    , contributor
    Comments (2074) | Send Message
     
    I think Ackmans comment here is his biggest problem, His ego. He sees himself as a "Big Boy" and above everyone else in the industry including people like Icahn and Soros. In this regard, Ackman is a fool and this is what is taking him down and will finish him.
    10 Dec 2013, 07:50 PM Reply Like
  • EARLPEARL
    , contributor
    Comments (217) | Send Message
     
    ...no one and no hedge fund has a better track record or anywhere close to SOROS..DRUNKENMILLER.. STIRITZ... AND ICAHN the performance of those 4 men over last 30 years can not be matched by anyone or any fund....so with this in mind lets all short a stock those 4 own....sounds like a no brainer to me..
    23 Nov 2013, 04:21 PM Reply Like
  • MK71
    , contributor
    Comments (136) | Send Message
     
    Earlpearl,
    always do your own dd. Following any HF is dangerous. They typically do their dd but may not reveal all. So you only might hear about them leaving their positions at their next filing which may be out for another 3 months. You may care about them, they don't care about you.

     

    In the case of the main player in the HLF game: Ackman.
    His exact position till date is unknown. People are still guessing about the number of shares he is short. One has no filing or so to see his position as a fact. One has to believe him. Then he turns 40% of that short into puts. strike, quantity and maturity unknown. No filing again so you have to believe him again that he is still in for the same profit.
    He might have long heavily out of the money calls too; just in case.
    I have not heard him mention any of the other shorts or have seen him shown any care of their losses.
    And neither has Loeb, Icahn, etc. Only reference made to another investor by an investor was Loeb on Icahn. I read that was more in the interest of Ackman being crushed than for care of Icahn.
    Icahn has a very nasty reputation of taking care of himself over any other stakeholder, so don't follow him blindly. For him this play is peanuts with Ackman as a trophy. If he looses too bad for the money, but more sorry for not crushing Ackman. Don't be collateral damage in the play.
    26 Nov 2013, 06:03 AM Reply Like
  • EARLPEARL
    , contributor
    Comments (217) | Send Message
     
    sounds like you have not read what druckenmiller had to say about stiritz....stiritz and Icahn are friends and have served on boards together.....Icahn wants to destoy ackman and stiritz wants to double his net worth....those 2 along with soros..bass and etc. are going to run it on up to 100 or more and everyone will live happily ever after EXCEPT ACKMAN....
    26 Nov 2013, 10:07 AM Reply Like
  • Randy Schroeder
    , contributor
    Comments (41) | Send Message
     
    What is mod missing in all of this is the fact that HLF is among the best, if not the best direct selling companies in the world.

     

    (I am not in any way affiliated with HLF, nor have I ever been)

     

    I am 20+ year participant in the direct selling industry. I am widely considered among the top leaders nationally and internationally. Mr Ackman needed only to review the "Amway Decision" of 1979. A simple comparison of that ruling to the practices of Herbalife distributors could have saved his investors $500 million (so far)
    24 Nov 2013, 10:06 PM Reply Like
  • MK71
    , contributor
    Comments (136) | Send Message
     
    Interesting ruling if compared to the allegations made by Ackman and reiterated on Bloomberg TV. How can he be so sure of his case? Even a violation by Amway was fined a small amount.

     

    Also interesting timeline: in 1975 FTC filed a complaint. No indication when their investigation started. Only in 1979 a final order was put out.

     

    So it can easily mean that in 2014 the FTC files a complaint and only in 2018 the final order is there. That is a whole string of puts. And then no guarantee of a nice pay out.

     

    From MLM experts I hear many times that Amway is much worse than HLF.
    26 Nov 2013, 05:11 AM Reply Like
  • taninvest
    , contributor
    Comments (404) | Send Message
     
    MK you are correct about Amway. Check out their website & see how grossly over-priced their water-filters, detergents & household cleaners are. Yet, the FTC does not consider Amway a pyramid scheme. HAckman shorted HLF before having a basic understanding of the MLM industry.
    26 Nov 2013, 07:33 AM Reply Like
  • ninjahatori
    , contributor
    Comments (578) | Send Message
     
    In slides 22/23/24 of his Robin Hood Slide show , Ackman points to the fall in share price of Herbalife, as market discontent over Herbalife's answers about tracking retail.

     

    Why didn't Ackman explain at the conference why the stock has moved up since then ? Can it be market contentment that Herbalifes all right and nothings is gonna stop it ?
    26 Nov 2013, 10:06 AM Reply Like
  • Akmanscam
    , contributor
    Comments (2074) | Send Message
     
    Ackie only reports what he wants people to hear and see. What will benefit his case.
    10 Dec 2013, 07:51 PM Reply Like
  • Akmanscam
    , contributor
    Comments (2074) | Send Message
     
    "Quoth the Raven" and "Crimebusters" are conspicously absent from this thread. They were so confident the night before, so sure that Ackman would come down with his "Hammer of Justice" Methinks he has been reading too many Edgar Allen Poe novels. I am surprised he didn't say that MOJ would be assaulted by a raven.
    10 Dec 2013, 07:53 PM Reply Like
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