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Herbalife Ltd. Message Board

  • vvidscape vvidscape Jan 28, 2013 8:10 PM Flag

    WHAT A DAY!!!

    From a week ago, I was brainwashed into thinking that this was now range bound. But now I'm convinced, that it'll trade down to 32-35 range in the coming days. But I remain on the sidelines and would treat this as a case study and something to learn from. I have never seen a story like this in my 17 year trading experience. So, I look for patterns to understand and learn.
    Watching Ackman, I have learnt that he is shrewd and composed. He had decided to work around HLF in doing damage after taking it head on in december. He first went to China and convinced them to build a case agains HLF. He knows thats an easy one given that corruption runs rampant there. Next he might have investigated Fortune HiTech and convinced his inside contacts at FTC to bring them down as the case is clear cut. Yes, this may be a possibility. He knows that people in the MLM sector will run to the exits until there's selling exhaustion. Bottomline, he has pushed HLF price away from that 50-53 range where he could get squeezed.
    From HLF standpoint, today was a good day for their buyback. Did they load up 2+ mil shares? Who knows?
    For Icahn, this is slap in the face, even though Ackman didnt directly trigger this drop. Is he thinking a quick in/out by buying it from here to 52 and taking a 15-25 point profit from there when it runs upto 65-75 range? Or is there a possibility where he'll leak a tender offer discussion which could be real but never materializes. If he discusses a $62 offer, that would take the stock to the 80s. Would it be legal if he backs off and sells his holdings at those lofty levels?
    The hedge funds on the long side know that Ackman, even single handedly is dangerous. They cannot afford to run this stock up in a steady fashion because Ackman can orchestrate a disaster in a day. Whatever they do needs to be swift and sudden. All said and done, I'm still learning and so is everybody.

    Sentiment: Hold

 
HLF
51.60+0.37(+0.72%)Oct 24 4:01 PMEDT

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