Bill Ackman Enters The Metropolis Of Stalingrad

Influenza A virus subtype H5N1 few days agone I wrote a post describing shorting multi-level marketing schemes equally akin to the Battle of Stalingrad.

Little did I know that Bill Ackman was shorting good over a billion dollars inward Herbalife stock. [If y'all quest the figure y'all tin dorsum function it out from comments in this BBC interview.]

Ackman has publicly said his target for the stock is cipher - together with the size of his put (huge both amongst honor to the companionship together with his fund) together with the ferocity of his attack means that his entirely honourable out is the full collapse of Herbalife.

Moreover Ackman is a rattling wealthy homo controlling funds considerably larger than Herbalife's resources. He has said he can't live on bought off. The entirely manner Herbalife is going to instruct rid of him is yesteryear totally defeating him.

This is the hedge-fund equivalent of Stalingrad. Someone is going to lose big. And the victor volition live on together with thence bloodied that the give-and-take victory volition audio hollow...

For a short-seller who is equally risk-averse equally me watching this is pure hedge-fund porn.







John

PS. I am utterly convinced yesteryear everything inward Bill Ackman's presentation except the in conclusion decision - that Herbalife's stock volition collapse. I took a long put on Christmas Eve. I suspect that Herbalife is together with thence profitable together with and thence powerful they volition come across Mr Ackman's assault off - together with the easiest manner to produce that is to purchase dorsum stock (and brand the stock become up). Mr Ackman has given them the incentive to provide their huge (but tainted) profits to shareholders (and I innovation to live on a recipient shareholder).

PPS. Ten years agone Ackman's quondam fund (Gotham Partners) wrote a defense forcefulness of a multilevel marketing system called Pre-Paid Legal Services. They were long (which turned out OK inward the end). The PDF document was called: "A Recommendation for Pre-Paid Legal Services, Inc". If anyone has a re-create of the master copy PDF I would appreciate it. These days the study is entirely remembered because Gotham wrote the bullish study together with sold stock into the subsequent rise. Elliot Spitzer investigated (an investigation that went nowhere).

J