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Herbalife (HLF -5.8%) reverses an early bounce following yesterday's plummet. It's a broken...

Herbalife (HLF -5.8%) reverses an early bounce following yesterday's plummet. It's a broken momentum play, suggests Michael Davey, ignoring for a minute the Einhorn story, and just looking at the chart. He compares it to CROX, which years ago made an all-time high, gapped down the next day, and just kept sinking.
Comments (3)
  • I don't understand why Einhorn's caused the stock to tank. So what if distributors are using the products themselves ? At the end of the day, the company is making sales, which are translating into cash.
    2 May 2012, 03:10 PM Reply Like
  • Day 2 of the bear raid. Bears 2, Bulls 0.

     

    30 million shares were supposedly sold (and bought yesterday) and another 22 million today. vs. less than 2 million average. We will not know for some days how many were actually really transacted.

     

    The shorters playbook is in use here. 1. Create doubt and confusion, 2. Seed some big selling (stop losses will add ten times to your seed,) 3. Watch and see what happens, 4. When the panic selling subsides launch your main attack (case against the company.) 5. Watch and keep plugging until price objective achieved or until the price won't go down and you have to cover.

     

    Duck for cover, the main attack is yet to come, and we've seen the impact of the initial salvo.

     

    Disclosure: Long HLF
    2 May 2012, 05:25 PM Reply Like
  • Comparing CROX to HLF is like comparing Magic Jack to ATT. Crox fizzled in 9 months, HLF has had steady growth since 2002 with more projected. Analysts are backing their ratings to the last man (or woman...check out Bolton Weiser assessment from Caris & Co). Investigated and cleared of same allegations just a few years ago. Management is being more transparent than anyone could ask. Customers love the company. Sales jobs carry a 10% success rate, whether it's Real Estate or nutrition products. Einhorn is flushing something for nothing to make up for RIMM and Xerox imho. SEC should instead investigate collusion, along with CNBC's Herb Greenberg. What a hack...
    2 May 2012, 11:58 PM Reply Like
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