https://docs.google.com/spreadsheet...UUlYMVFRNDRHdkVNYkdDdHhKa0E&usp=sharing#gid=0
current stock price 38 3/4
Herbalife (HLF) Exposed!
- Thread starter lwlee
- Start date
https://docs.google.com/spreadsheet...UUlYMVFRNDRHdkVNYkdDdHhKa0E&usp=sharing#gid=0
current stock price 38 3/4
He is definitely not long stock (at least does the stock position not make up for the majority of his position), he is mostly long the upside calls of varying maturities. Nothing else, nothing synthetic, nothing exotic, nothing magic, nothing mystical.
A much better question is why he chose the exposure through this particular product. My hunch is that long-term because it shows/masquerades his commitment. I believe he chose call options because it could inflict maximum damage once a squeeze is in play (classic example: Volkswagen-Porsche short squeeze drama a while ago). This guy made and still makes half his wealth through intimidation. Though I side with Ackman in regards to the true fundamentals of the company but I believe he put himself into a very vulnerable position.
A much better question is why he chose the exposure through this particular product. My hunch is that long-term because it shows/masquerades his commitment. I believe he chose call options because it could inflict maximum damage once a squeeze is in play (classic example: Volkswagen-Porsche short squeeze drama a while ago). This guy made and still makes half his wealth through intimidation. Though I side with Ackman in regards to the true fundamentals of the company but I believe he put himself into a very vulnerable position.
Actually, that's how you pronounce it:
http://dictionary.reference.com/browse/herb
Click on the audio...
[urb or, esp. British, hurb]
Right now I could care less what Icahn says or does. Facts are herblife sells dubious products under false pretenses with a pyramid scheme structure. It's going down.
Maybe US pronounciation west of the Pecos ?
Word Origin & History
herb
late 13c., erbe, from O.Fr. erbe, from L. herba "grass, herb." Refashioned after Latin since 15c., but the h- was mute until 19c. Herbaceous is from 1640s.
Online Etymology Dictionary, © 2010 Douglas Harper
Cite This Source
He is long the synthetic, he sold puts and bought calls, so he is long delta1 in Herbalife.
The current history of HLF:
"The open interest put/call ratio on HLF is now 1.19. This is a 4-month low after soaring as high as 2.75 in late November. I now think this is less an indicator of bullishness and more representative of a strong desire of HLF shorts to remain hedged. Short interest has only dropped about 10% this year since reaching a peak of 37.3M shares to start the year. As shorts weather headline risks, a likely HLF buyback, and now the prospect that HLF could be taken out at much higher prices by the likes of Icahn, they are also paying a quarterly dividend yield of 3.1% at current prices. Short interest is now 34.8% of the float. The apparent preference to use options to hedge means that the long-term options (LEAPS) show no indication of a bet that HLF will eventually go to zero: the open interest put/call ratio is 1.0 for January, 2014 expiration. Open interest is extremely small for January, 2015 expiration; these are too expensive for now to buy for a hedge.
The next big event for HLF should be earnings this coming week. Earnings will be released on February 19th after hours and a conference call will follow the next morning. "
"The open interest put/call ratio on HLF is now 1.19. This is a 4-month low after soaring as high as 2.75 in late November. I now think this is less an indicator of bullishness and more representative of a strong desire of HLF shorts to remain hedged. Short interest has only dropped about 10% this year since reaching a peak of 37.3M shares to start the year. As shorts weather headline risks, a likely HLF buyback, and now the prospect that HLF could be taken out at much higher prices by the likes of Icahn, they are also paying a quarterly dividend yield of 3.1% at current prices. Short interest is now 34.8% of the float. The apparent preference to use options to hedge means that the long-term options (LEAPS) show no indication of a bet that HLF will eventually go to zero: the open interest put/call ratio is 1.0 for January, 2014 expiration. Open interest is extremely small for January, 2015 expiration; these are too expensive for now to buy for a hedge.
The next big event for HLF should be earnings this coming week. Earnings will be released on February 19th after hours and a conference call will follow the next morning. "