Ackman has made a case without any room for wiggle that HLF is a ponzi scheme and a Ponzi scheme is worth zero.
If he covers for any reason, regardless of his disclaimer, if HLF continues to operate and does not go out of business, Ackam is finished.
He has left no room for error.
IMO Ackman has made a fatal mistake to go to such an absolute extreme which is beginning to sound more peronal than anything else.
If HLF doesn't fail or if Ackman covers, he will be looked upon as a market manipulator and no one will invest in his fund anymore. He would've actually opened himself and his fund up to major weakness as the sharks will take contrary positions to whatever he does in the future, if he survives.
Ackman is covering big time imo. He's not holding this thing short. 172k buying blocks all over the place Friday afternoon. The pricing action was obvious. Retail shorts are going to get their heads handed to them as the shorting dries up. Monday is going to be fun.
Sentiment: Strong Buy
Hi guys, everything is possible, and attached to his money. He may admit he made a mistake, and cover all his short shares in a week, and suddenly become the largest shareholder of the company.
What are you guys thinking..., his credit, his hedge fund, and his firm ... all these do not matter for him. Money is the only thing for him.
As for the stock price to zero, I do not think so. HLF has its loyal customers. See the financial results from last drop. It did not affect revenue much (am I wrong?). 20+, even 26 is possible to be the bottom. If you buy it now, you may have a double soon.
Just make sure you are not helping his by letting your shares loaned out for his shorts. Avoid to selling your share at the close bottom. Watch your own money for yourself.
Sentiment: Strong Buy
Personally, I don't think HLF will go to zero. Book value is around $4. I think $15 is possible though.
Many bet on LVS going to zero. From a high of $148.76 in Oct 2007, LVS got to $1.38 in March 2009, more than 99% retrace - but it did not get to zero.
Ackman doesn't have to wait for HLF to get to zero and cover. There is no such binding obligation. He won't be sued if he covers above zero.
But HLF investors can suffer much pain before it climbs back up.
I had figured 7 was the bottom a few days ago due to the phantasmorgasmic statements of the longs buying in. The longs have gotten a little less psychotic in the last day, and the hallucinations they are having of a big rebound are subsiding. They are still living in fantasyland but now they are closer to the exit than the middle. 15 actually might end up being the bottom.
I can't believe the naivete of the True Believers. What will you guys do if your management has been practicing bad accounting, and it's too late to get out to avoid losses? They could re-state earnings for the last three years and this could suddenly be a penny stock.
I don't have a position either way in this one, but the doomsday scenario happened to one of my stocks once. Once. I now heed all red flags. This is your chance to do the same before the lesson learned is a hard and expensive one.
I don't think this will be forgotten soon. Too many shareholders and distributor mom and pops got hurt for one person's actions.
Ackman has left no room for error. He has gone to the absolute that HLF is a ponzi and stated therefore the value of a ponzi is zero. Therefore there should be no need for him to cover his short. If he does anything else but to ride this to zero, he will have absolutely no credibility, would open himself up to lawsuits.
Doesn't matter what disclaimers he has. Disclaimers do not prevent lawsuits. Disclaimers act as a deterrent for lawsuits and the aggressiveness and in your face behaior he has taken, cannot be prevented with disclaimers.
Remains to be seen.
Good point. IMO all this short attack is pure manipulation. He waited and waited to have a big short position on this company to then come up with the attack of the ponzi scheme scenario to create a panic selling. Then to make things more as part of a masterpiece plan he came up with the idea of donating proceeds of his short position to charity trying to gain sympathy by the public that this attack is for the sake of the people in need...hahaha such a clown. SEC and FTC will clear HLF soon. He will be seen like a pure manipulator.
he had no choice,,,,time was running out im assuming he shorted at 70 n 50 there explaining why the stock has not climbe above 50 since may.......h was shorting every uptick ....now the stock at 45 year ending fiscal cliff looiming earning due in feb...he cant risk hlf going into earning and then a div payment coming......thats why he picked put expiration the week before holidys to announce his short....started a website to say he is serious ...trying to force institutional holders to liquidate their shares inpanic mode.dropping the price rapidly im sure he is covering slowly .....im sure iwas aware most everybody was going to out for the hilday or getting ready to lieave........ lbo is hlf only way to remedy this
Doesnt help all the stockholders he hurt; furhter the controversy he created is sure to damage earnings as distributors get scared -- as he pointed out, he chose the timing for just that reason.
His charity pitch is a smokescreen. This is not a good man.