Friday, 22 November 2013
Debacle between Hedge Fund Titans on Herbalife is getting ludicrous
Bill Ackman just appeared on Bloomberg TV on his short position of Herbalife. Head over here for the full interview.
Here's the succinct points on 7 Hallmarks of a pyramid scheme by SEC and Ackman says it exhibits all 7:
1) emphasis on recruiting
2) promises of high returns in short period
3) easy money or passive income
4) buy-in required
5) complex commission structure
6) no genuine product or service
7) no demonstrated sales revenue
***Update as of Nov 25th 2013: Poll results as shown***
This Herbalife trade has been the most high profile trade/investment to date. Ackman on the short side (he has change the structure of his trade from short stocks to buying put options with target of 0; and if the company were to be taken private he will restructure his trade to CDS).
On the other side of his short trade are the legendary hedge fund titans: Carl Icahn, George Soros (who used to have money managed by Ackman but have yanked it out), Stanley Druckenmiller, William Stiritz, Kyle Bass, and Dan Loeb (profited out of the position).
Read more here: Articles by Hedgie