Is Ackman the Lone 'Big Short' in Herbalife (HLF)?

December 21, 2012 10:55 AM EST
Traders are chatting about Herbalife Ltd. (NYSE: HLF) on the discovery that Bill Ackman may be the lone 'big short' in the stock.

Yesterday, Ackman said he is short "over 20 million shares" of Herbalife. However, data as of 11/30/2012 showed that total short interest in the stock was 20,724,993 shares. Markit puts it higher at 24 million shares this week. Still, based on the data, Ackman and his Pershing Square hedge fund could be covering between 83-100% of the short himself. What's more is that with a public float of 105.9 million shares, short interest is already near 20 percent of the float and according to some it is hard to borrow.

Maybe most interesting, is the fact that other notable hedge fund titans, including David Einhorn and Jim Chanos, were also said to be short the stock. If this data holds up, and Ackman isn't employing some type of equity swap that is disguising the short, he may in fact be the lone big short in the stock.

This morning, Herbalife Ltd. said it host an analyst day the week of January 7th, 2013 to respond in detail to what it calls "the distorted, outdated and inaccurate information contained in Pershing Square's presentation."

Shares of Herbalife are down 25 percent since his short in Herbalife on Wednesday, including today's 6 percent slide.

Serious News for Serious Traders! Try Premium Free!

You May Also Be Interested In

Related Categories

Hedge Funds, Insiders' Blog, Trader Talk

Related Entities

William Ackman, Pershing Square Capital, Greenlight Capital, David Einhorn, Hedge Funds, Jim Chanos

Add Your Comment