Some hedge fund managers use their leverage to manipulate stocks. Everyone in this board knows who the most infamous manipulator is. He is now wounded and humiliated by his greed. FMCN is the most solid proof, as it is taken private at a big premium.
Now comes HLF. People rightfully questioned Ackman's motives. Hedge fund managers are supposed to be the smartest. But their performance is still lousy. And I can see some getting desperate as the year ends. Competing among the smartest, one needs to use tricks, like leveraging the one-time fame.
My question to Ackman is, even when the profit from the short sales is donated, would that still be counted towards his performance? If so, I would also be glad to sacrifice one cent for a dollar.
Barron's had an article yesterday about these "hedge-fund porn" and suggested the SEC should force short-sellers to fully reveal their holdings. If SEC had done its job, MW would have been revealed no more than a pure and utter stock manipulator. EDU going to zero was just a B.S.
Great fight going on! I wish in the EDU case some other hedge fund manager could also have come out and yelled "LONG" and got Muddy Waters killed. Muddy Water did not have the guts like Ackman to say "not covered a single share." Instead it must have taken the money and run, the money from those loser sellers at below $10!
Today another piece of news -- one activist taking on another. From Barron's:
----- Chapman also infers from Ackman’s going public that he has already concluded regulators will take a pass. “I believe Ackman already had concluded the FTC wasn’t going to assist his crusade. Instead, he realized that he had to focus on existing and prospective HLF distributors, praying the media attention would have a materially deleterious impact on any decision to join or to continue with the HLF team. Indeed, without the FTC taking injunctive actions against HLF, Ackman’s crusade toward ‘zero’ is doomed,” he writes. -----
This just proves my point that those one-time hitters use the media to manipulate stocks. They do not deserve that much credibility. If you blindly follow them, you are also doomed.