Just like everyone else on Wall Street and the Financial Blogosphere, I fu*kin hate Bill Ackman; I hate the mofo’s guts. And the same applies to Carl Icahn. Both are filthy rich, arrogant, cocky mother-lovers. But, my personal hatred aside, I honestly believe that Bill Ackman is right on Herbalife. I don’t have a 1000 page PPT like Ackman to prove my point, but anyone who has taken a closer look at Herbalife’s business model, will tell you that it is a fu*kin Pyramid Scheme. Just like Bernie Madoff. And all the other ponzi schemes out there intellectually structured to dupe innocent people of their hard earned money. I wont spend a whole post on explaining Herbalife’s business model; for that, I refer you to Herbalife’s Website (Herbalife.com), or Bill Ackman’s Website Dedicated To Herbalife (Factsaboutherbalife.com), where he has explained Herbalife’s business model in great detail. Don’t be a bitch; just keep an open mind and you’d be amazed at what you’ll learn.
Back to my point. If you haven’t already, here is the CNBC bitchfest between Bill Ackman and Carl Icahn that started all this “My D*ck Is Bigger Than Your D*ck” BS:
Right after that interview, Carl Icahn dramatically started buying HLF Stock/Call Options like a deranged lunatic. Why? you might ask; EGO, of course.
As you can see, Carl Icahn’s trade is based solely on EGO; whereas Ackman has spent a good deal of time getting his d*ck wet in the ins and outs of Herbalife. Not just that, given all the bad publicity Herbalife has received recently, it’s just going to scare more people from getting involved with Herbalife, and become their “DISTRIBUTORS”. Sure, Herbalife can go to some other country like Zimbabwe, Kenya, China, or India, and continue their scam in an efficient way; but that’s just not sustainable. Do you really think, people in developing countries, like the one’s I mentioned above, can afford buying Herbalife’s sh*t for $100+. I don’t think so. Then again, I could be wrong.
Ackman’s entire $1 Billion Short on HLF is at the mercy of the FTC (Government) stepping in and declaring HLF as a pyramid scheme. Icahn’s entire Long bet on HLF is based on the hope that he can create the “Mother of All Short Squeezes” by forcing Ackman to cover his Short. I believe Icahn is just bluffing to squeeze some easy bucks out of the trade. In the long run, Icahn knows that HLF is a pile of Horse-Sh*t and just LBOing HLF wont make the existing problems go away. If Icahn can force a Short Squeeze on HLF, I bow down to him. Then again, it’s been almost 4 months since Icahn initiated a Long position on HLF, and there still aren’t any signs of a short squeeze. In fact, Icahn is probably losing money on HLF as of this writing, if you consider the fact that Icahn’s average price on HLF is $36; HLF last traded at $35.60; Ackman on the other hand is in-the-money on HLF, with his average Sell (Short) Price @ $45.
In the midst of all the Ackman-Icahn, Icahn-Ackman chaos, the clear winner has been one of my favorite Hedge Fund Managers, and the sneakiest mother-lover alive: Dan Loeb. The nigga just slipped in-n-out; made some serious money (Loeb’s avg. entry price on HLF is approx: $27-$28), and nobody even noticed. That’s how you play the game and win like a BOSS.
As for the actual HLF stock, I recommend you stay far far far away from that piece of boiling molten lava. It’s been trading in a tight range and it can burst in any direction. You don’t wanna be a hero and get your ass handed to you on a silver platter.
Stay Away From HLF.
Recommendation: DON’T TRADE $HLF. EVER.
Opinion: HLF will eventually file for bankruptcy. Don’t know when; but, IT WILL HAPPEN.
Icahn 13D Chart: ZeroHedge
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