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Herbalife Ltd. Message Board

  • hudget hudget Aug 22, 2014 2:01 PM Flag

    So Ackman

    paid $7 per option to extend from 5 months to 17 months for this scheme to collapse. Someone bought his 2015's at 8 which seems like a high price to me given the time frame. Possibly the same counterparty he has been dealing with all along on both sides of this trade. this is not good news for longs. Shows his commitment to the downside.. And recognizing the loss on options is good as it reduces the overall tax load. He is up BIG this year with many built in gains.

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    • If someone was bullish on HLF, selling these puts short for 8 would actually be a good trade. A good plan would be to roll down to lower strikes in case the price declines. It would not surprise me if someone like Icahn is already doing this trade.

    • It actually may be good news for the longs. His commitment to the downside is not the same as it was. It did not go as planned for him. He had to EXTEND THIS PLAN FOR ANOTHER YEAR. Will shorts follow or cover? Probably cover.

      Sentiment: Strong Buy

    • jbrown010949 Aug 23, 2014 8:05 PM Flag

      Since Ackman rolled his puts to January 2016 50, will he close his shorts? Which I am sure is costing a lot..

    • I stand corrected. Ackman MADE MONEY on the jan 2015 options and rolled those GAINS over into a longer dated January 2016 50 puts. He must be VERY CONFIDENT this will be a big winner and it has to go to 35 before he even breaks even on his latest trade, 36 or so if you net out the gain on the last set of options. Anyway it has to drop a LOT for this trade to be profitable which means he is quite confident the bottom will fall out. And do not forget Ackman is one of the TOP PERFORMING hedge funds over the last 10 years and THIS YEAR also.

      • 4 Replies to hudget
      • If the share price were to drop to 40 within the next few months, he would make around 40% profit on his Jan 2016 put options. He could then start scaling out of his position. Another strategy would be for him to start selling short lower strike puts as the share price declines to create put spreads. But most likely, he is not planning to do any of these strategies. I agree that he is paying a huge time premium for these options. One of the most difficult decisions is when to take your profit. If he is determined to prove a point, he may end up holding these puts for too long and lose all of the premium.

      • In the scheme of things 45 million is not a material amount compared to his real approximately one billion dollar short position. If he had not extended these puts, his larger case would be questioned.

        Sentiment: Strong Buy

      • Agreed. Smart move to roll this out another year. He must feel confident because this will most likely be his last chance with HLF

      • GAINS?????? He just paid an additional 7.50 premium and needs $35 to break even. He is SO CONFIDENT that he rolled his puts out ANOTHER year. This is no different than all his other fraudulent claims, China going to shut them down, PWC going down if they clear the audit. Stock going to zero. EVERYTHING just keeps getting pushed out further and further. I'll tell you who just got screwed, those SHORT term SHORTS who were told by Ackman that he had the goods at the last presentation and now he just told them that he is pushing out ANOTHER year. Guess what he will do in 10 months? Figure out a way to try and cover his BAD JUDGEMENT. Just like his bad judgement in Gotham where he kept pressing his retail bet because his EGO would not let him move on and call it quits.

        This game he is playing is Gotham 2.0...count on it.

    • Up big this year.
      BK in 2015 due to massive losses from HLF being cleared, prosecution for insider trading with Allergan. and lawsuits from Allergan and from clients for his irresponsible losses in HLF and Allergan.

      Sentiment: Strong Buy

    • Shows his commitment????? Really, it shows just the OPPOSITE. It clearly shows he doesn't think this will happen anytime soon like he planned. You are a FOOL.

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