Saturday, May 31, 2014

Sleepless nights

I recently had coffee with a friend and I didn't have much to say. In fact a bunch of people have been wondering why I haven't had much to say recently. Why say anything at all when someone has already said so much for you?
"I have to ask how the Shorts sleep at night? As a percentage of shares outstanding, I believe that the company is one of the most heavily shorted of all companies listed on a U.S. exchange. The shorts are playing a dangerous game of musical chairs. When the music stops, I believe that there will be a furious rush to match players with chairs and the price at which the market clears will be materially higher than it is today. If that were not enough, the game of musical chairs gets more dangerous with each passing week. I estimate that the company currently generates millions of free cash flow a week and uses that cash to retire shares. At the current share price, the company is able to remove millions of shares annually."


  1. Skeptic, please do not allow the likes of Ackman and the biased NY Post reporter to win this rigged game. Your silence will only encourage them to continue. Ask yourself why they went to such great lengths to expose you.

    1. The NY Post reporter (presumably Michelle Celarier) is probably a total screw-up...

      But The Real Rigged Game is $HLF itself with its false promises of people making lots of money if they just try really, really hard.

      Furry cows moo and decompress.

  2. Skeptic21. That's a lame response.

    Using that old PrePaid Legal report is about as useful as using old quotes from Warren Buffett in support of his purchase of US Airways before he figured out airlines suck and destroy capital for shareholders, or using his quotes about Gen Re/Ron Ferguson before AIG and Ferguson went to prison for fraud, or the glowing remarks he made about Solomon and John Meriwether before... or Dexter Shoe...or David Sokol... or shall I continue?

    Is it possible Ackman owned something and had a conviction but, despite his best efforts at the time, it was a scam and he was wrong and then having done work on another company years later and learned more, changed his mind? Even the BEST change their mind, correct?

    Or... is it possible PrePaid wasn't a scam, because it was a different set of facts and circumstances, even though they sound similar - and someone looking to make a cheap argument to the untrained and ignorant would try to pawn it off like a cheap suit. Pre-Paid legal is not Herbalife. Jefferies is not MF Global. I could go on.

    I have said the following many times before... given the profile he has raised, the questions and transparency he has demanded of Herbalife, I would encourage Bill Ackman to simply answer the question: Why does it appear you said these things about PrePaid... and now take a 180 degree opposite view on Herbalife today? Whatever the answer it, let the truth be known. It won't sway my conviction on the HLF short thesis. But I am curious. And answering it would foreclose one more lame counter argument for Herbalife.