The Ira Sohn Investment Conference is taking place in Manhattan today where many of the best money managers, John Paulson, William Ackman, and Jeffrey Gundlach are present to share their ideas on investing.
According to new analyst notes mentioned on EquityPremier.com (1), it's been discussed that David Einhorn's hedge fund Greenlight Capital is shorting shares of Herbalife. Herbalife, a pyramid scam depends on someone buying nutriton products and recruiting others to sell the products as well as selling the product to consumers. This comes after he participated in a conference call on May 1st to discuss methods used to gain customers.
Critics like Count Caris and Company analyst Linda Bolton Weiser feel that Einhorn will announce a short causing her to cut the stock to average from buy just last week noting the grave risk in buying stock. In fact Bolton Weiser believes once Einhorn talks, the stocks could collapse. In her opinion this can be avoiding if management shows, "its confidence in future cash flow." They could do this by reinforcing share repurchases or possibly boosting the cash dividend.
The fate of Herbalife is hindering on what Einhorn will say at the conference. Whether it's a pyramid scam whose days or numbered, or a strong business worth investing in, is yet to be determined.
(1) EquityPremier.com - Institutional-grade news sourced from outlets including investment banks and ratings companies. - http://www.equitypremier.com
Fair disclosure: I do not own any Herbalife stock currently, but do intend on involvement within the next 14 day period.