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Herbalife Ltd. Message Board

  • retailexecutive retailexecutive Aug 9, 2013 3:41 PM Flag

    Ackman set the bed on fire

    And now he must lie down on it. He has lost $600 million at JCP under his direct approval as investor and a member of the BOD. His short of HLF was inspired by Einhorn's recent successes in short selling and he decided to out do the master and help off set the loss impact of JCP shares on Pershing Square's investors. Due to the timing in late December and the twitchy nature of bad news he made an initial good trade. What he did not understand was that many investors would look at the premise and his thesis of these investment trades and see the obvious flaws of logic.Misunderstanding and misrepresenting key data points and coloring them in a light that justified both his long in JCP and short on HLF.It was soon discovered by a lot of small and large investors as a flawed investment strategy. He is down over $300 million in HLF and bringing the total to over $900 million to date. I firmly believe the loss here will approach the loss at JCP before it is over. Furthermore I believe it is unstoppable unless he has hedged in a major way and I do not see that he has done enough if any to date.
    I really do not know what makes intelligent , well educated people make consistently bad decisions in a major blow up like this one. It is clear we are witnessing the financial meltdown and the potential self destruction of a once respected Wall Street player. That is the real story here. Ichan and Chapman and perhaps Soros had some insight in that and decided to capitalize on it. Longs will win as Ackman's form of financial vigilante action will get no help from the Congress or Government Agencies as the requests are so transparent and incorrect that they can not take action as none is merited.

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    • The only thing I would add is the amount of money in terms of your anticipated loss of $600M. I believe that iAckman's loss will skyrocket into the billions of dollars which will result in the blowup of his hedge fund. He's on the verge of total financial annihilation and he does not seem to have a single clue what is happening around him. Ackman has given an enormous financial incentive for an array of enemies to profit at this demise. Icahn, Loeb and Soros are all very good at their jobs and they know exactly how to do this. I believe JCP is going down into single digits perhaps on its way to zero. I believe that HLF is on its with into the 90s perhaps on its way to $300.

      • 2 Replies to pb_harris4
      • You may be correct on the final loss. I may not have been clear. I believe the loss on HLF will also be in the $600 million + area. JCP will most probably file chapter 11 after Christmas sales come in but I believe he will sell out before then. Starbucks CEO is on the phone with CNBC supporting Mike Ullman and blasting Ackman's behavior . The mental breakdown of Bill Ackman no matter how you feel about him is tragic like watching a plane crash in slow motion. How many investors will die along with Bill on his flight I wonder ?

    • How soon will the music stop ? I would like to hear some opinions. I think by Labor Day but could be sooner.

    • Very well stated. The music is slowing down and when it stops many shorts will not find a chair.

      Sentiment: Strong Buy

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