250 million dollars as the stock, expected to drop actually rose 25 pcnt on tuesday and Ackmann is short a billion dollars worth…
Ackmanns premise that Herbalife is a pyramid scheme and makes money from distributor purchases rather than end users who can buy similar products much cheaper maybe true, but is it worth staking your reputation on it….stubborness is not good..if you get wrong or it just simply not going your way exit.
2centview sends out ideas some do go south, but some do go right..if you make twice as much money in your gains versus your losses you will make money but being stubborn and holding a loss making position is not part of the strategy
Fv = 80
Do not get involved Herbalife unless your 100pcnt sure Ackmann is wrong!
Sent from my iPad
Average daily volume on $BLNX is around 6million shares – and big hedge funds will probably short 2-3mm shares at least – easily moving the market.
With the uncertainty around the business model, there is no-one to take the other side and support the stock …so the stock caves in – it does look however that the 95 area is a support.
There is a similar situation with $HLF – HerbaLife (FV=65), which Bill Ackmann is short 800mm based on his view (and detailed analysis) that the business is an illegal pyramid scheme. $HLF, however has the almighty Carl Icahn on the other side of the trade supporting the stock and even adding 3 of his staff on the HerbaLife board.
Without an ICAHN for $BLNX we are at the mercy of the short sellers,,,, – the response to the Blog the company put out seems convincing… Citi have stuck to their price targets and commented positively on the seriousness they have put into the allegations and the independent reviews they have done….however … only time will tell whether the Blinx business model is sound.
Just hope the stock doesnt trade below 80p when stops may be triggered!
2CentView has a zero cost core position in $BLNX
$hlf will not go to 0 even if ackermann is right…as a spec play buy below 40 tgt 80 on squeeze stop 25.
75 chance ichan/loeb right and .25 chance axkermann wrong…if he is stock could easily go to 100