Stock Market Diaries

Several months ago, Bill’s short thesis on HLF was accepted by Wall Street and the media as “visionary”,  immediately sending the shares sharply lower. However, shortly thereafter, Dan Loeb and Carl Icahn bet against Ackman and went long HLF, which split the media and Wall Street elite between the two parties, Ackman v Everyone else.

Carl, always the skeptic, questioned the timing of Bill’s HLF bear raid and said so in a very public manner.

Carl got really mad at Bill, which was fueled by a prior engagement in which Bill sued and defeated Carl in court for monetary damages. His anger caused him to go on the television and deride Bill for his very public short position in HLF, calling it manipulative and stupid. Bill challenged Carl and told him to “make a bid for the company” if he liked it so much.

Carl was not amused.

Bill insisted HLF was going to zero and promised the FTC would act and shut them down.

Shortly after their public debate on HLF, Carl announced he was taking a very large position in HLF, as much as 25% and wanted seats on the board. Bill was chagrined by this news, as the shares skyrocketed higher.

Several months later, things at JCP went really bad to biblically wrong, led by former Apple exec, Ron Johnson. Mr. Johnson was supported by Bill Ackman and gutted the old retailer for a “new vision”, one that would make Bill “15-20 times” his investment. But that didn’t work out for Bill either, as the strategy failed. Ron Johnson was fired, leaving  the company in shambles and shareholders in ruin.

On the same day Ron left JCP, HLF announced their auditor was committing crimes, by trading on insider information. As a result, the auditor, KPMG, resigned from HLF. However, the drama thickened as the companies stock  remained halted for an undetermined amount of time, even after the KPMG news was released. Speculation ran rampant, as bull and bears debated the timing of the news.

Could Carl be making a bid for the company to destroy Bill?

Or, maybe the FTC decided to act upon Bill’s urging to finally shut HLF down?

The drama, as always, continues.

Stay tuned.

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