My journey with HLF began when I watched Ackman on Bloomberg after his presentation talk HLF down. I had seen this guy on TV before and my instincts said the immediate effect on this stock would be negative. I bought some puts and had a 600% return over the coming days. Then the stock turned and I reversed gears as well closing when it was at 40. The stock went to 47 after that and pulled back. The point is that I've been watching this drama for 9 month now. I like many thought the squeeze would kick in the moment the stock hits upper 50s...didnt happen, 60s maybe..nope. During its gradual ascent I watched Ackman get creamed on his JCP position. This guy was looking really really bad as Old dogs Icahn and Soros took opposing positions. Well here we are and still no squeeze. I have come to a realization that the squeeze will NEVER happen because its not retail but a deep pocketed hedge fund which has shorted it. Ackman liquidated many of his smaller holdings to raise funds for his APD position. At the end of it he may have still have 300 mil change. Now he has 500 mil from his JCP sale, so that make it 800 mil. Guys every 10 point HLF move, he puts in 200 mil, so to exhaust his cash it needs to move 40 more to 100! And even if it gets there he'll start liquidating his other positions. And the saga will continue. Jus think about it...if it gradually climbs to 80, analysts will step in and downgrade it as overvalued. Also since their business model has changed to cover past shady practices would result in decreased revenue and profit. So whatever lofty price the hedge longs will want it to get to can happen in some sudden spike. And the news would have to be out of this world.
I was never short. I did not see any discussion prior to the Sohn presentation. It took me three days and several reviews to be certain that he was dead wrong. I put the biggest bet of my life on it. Thankfully it turned out to be correct. Ackman is smart but the real problem is he thinks he is always the smartest guy in the room. That is a major flaw....hubris. Thanks bill for your help.
So you think that Ackman will liquidate everything he has just to stay in his losing short bet on HLF?
That's one of the most ridiculous and flawed statements I have ever seen on this board, and there has been some real doozies!
Do u agree that he has put in 300 mil to maintain his position (due to the loss)? Why did he liquidate PG, GGP, MATX recently? He's got 12 bill and knowing his brilliant stupidity he could liquidate 2 Bill more. I'm not stupid, he is. Btw, as a common man, my being stupid or smart doesnt matter. Eventually, his brilliant stupidity may end looking brilliant if the Icahn camp retreats after 1 year.