Battle-Hardened, Ackman Ready to Attack Herbalife (HLF) Again
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After nearly a year of getting ravaged from the war raging in Herbalife's (NYSE: HLF) stock, hedge fund manager Bill Ackman has survived and is slowly gaining his strength back. Battle-hardened, he is now preparing for a new attack.
Following up on yesterday's initial report from CNBC, Pershing Square confirmed to StreetInsider.com that Bill Ackman will indeed be presenting again about the MLM company at the upcoming Robin Hood Investors Conference being held Thursday, November 21 and Friday, November 22.
While the content of the presentation could not be learned, a Pershing Square spokesperson said "there will be new information."
Shares of Herbalife are up 50% since Mr. Ackman first revealed he was short on December 19, 2012. At the Ira Sohn conference, the day after the short became public knowledge, Ackman laid out a very detailed 334-page report on why Herbalife is a pyramid scheme and the stock is worth "zero." This is when the bombardment on Ackman started. After initially selling off on the 'Ack-attack,' some hedge funds smelled blood in the water. Not only was the Herbalife short thesis well-known for years to no avail, but now the sharks on Wall Street knew just how exposed Ackman was in the already crowded short. They colluded, intentionally or not, to create a short squeeze of epic proportion to bring down the mighty Ackman.
Former Ackman friend Dan Loeb of Third Point LLC fired shots first, snapping up an 8.2% long position to start off 2013. Others like Robert Chapman and Bronte Capital also suited up against Ackman. The Wall Street super power, however, was still to come. Following rumors of his involvement and an epic slugfest on CNBC, Carl Icahn, or 'Uncle Carl' as some call him on Wall Street, went for the jugular by disclosing a 14 million share, or 13%, position in the Herbalife in February. That position has since been raised to 16.5% with an option to raise it to 25%. Icahn has been calling for the "mother of all short squeezes" in the stock.
With Icahn leading the charge, the longs got the best of Ackman. In fact, in his third quarter letter to investors, Ackman disclosed he re-tuned his short position. He covered 10 million of his short shares, leaving him with 14.5 million and instead added long-term put options. Ackman believed that his re-tuning of the position takes away the potential of a short squeeze. So far he has been proven correct; shares of Herbalife are off 14% since the disclosure.
With the correct balance of short shares, Ackman is getting the feeling in his legs back. While Pershing Square would not confirm if Ackman has an 'atomic bomb' at his disposal, you better believe he has a high-caliber weapon. The Street seems to agree. Since the news hit mid-day Thursday, shares of Herbalife are down over 6%, including today's 2.9% drop.
To be sure, Herbalife and Icahn are likely already preparing a counterattack.
Following up on yesterday's initial report from CNBC, Pershing Square confirmed to StreetInsider.com that Bill Ackman will indeed be presenting again about the MLM company at the upcoming Robin Hood Investors Conference being held Thursday, November 21 and Friday, November 22.
While the content of the presentation could not be learned, a Pershing Square spokesperson said "there will be new information."
Shares of Herbalife are up 50% since Mr. Ackman first revealed he was short on December 19, 2012. At the Ira Sohn conference, the day after the short became public knowledge, Ackman laid out a very detailed 334-page report on why Herbalife is a pyramid scheme and the stock is worth "zero." This is when the bombardment on Ackman started. After initially selling off on the 'Ack-attack,' some hedge funds smelled blood in the water. Not only was the Herbalife short thesis well-known for years to no avail, but now the sharks on Wall Street knew just how exposed Ackman was in the already crowded short. They colluded, intentionally or not, to create a short squeeze of epic proportion to bring down the mighty Ackman.
Former Ackman friend Dan Loeb of Third Point LLC fired shots first, snapping up an 8.2% long position to start off 2013. Others like Robert Chapman and Bronte Capital also suited up against Ackman. The Wall Street super power, however, was still to come. Following rumors of his involvement and an epic slugfest on CNBC, Carl Icahn, or 'Uncle Carl' as some call him on Wall Street, went for the jugular by disclosing a 14 million share, or 13%, position in the Herbalife in February. That position has since been raised to 16.5% with an option to raise it to 25%. Icahn has been calling for the "mother of all short squeezes" in the stock.
With Icahn leading the charge, the longs got the best of Ackman. In fact, in his third quarter letter to investors, Ackman disclosed he re-tuned his short position. He covered 10 million of his short shares, leaving him with 14.5 million and instead added long-term put options. Ackman believed that his re-tuning of the position takes away the potential of a short squeeze. So far he has been proven correct; shares of Herbalife are off 14% since the disclosure.
With the correct balance of short shares, Ackman is getting the feeling in his legs back. While Pershing Square would not confirm if Ackman has an 'atomic bomb' at his disposal, you better believe he has a high-caliber weapon. The Street seems to agree. Since the news hit mid-day Thursday, shares of Herbalife are down over 6%, including today's 2.9% drop.
To be sure, Herbalife and Icahn are likely already preparing a counterattack.
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