Perishing Square Annihilated in Herbalife Squeeze

Herbalife announced they’ve come to terms with the FTC and pandemonium broke loose.

With approximately 20 million shares sold short, Bill Ackman’s Perishing Square, is writing a check it can ill afford right now (extra ride to Montauk). Losses range from $175-$250 million, for the day.

But who’s counting?

According to recent disclosures, Ackman’s playhouse of loss is down 17.5% for the year, prior to today’s drubbing.

Fellow cyclist to Bill Ackman, Dan “Mr. Pink” Loeb of Third Point said in a conference call today that he’s upped his long exposure and thinks you’re all stark raving jungle gorilla mad for even thinking of recession. After all, there aren’t any signs of it.

As such, he’s taken liberties to up his long exposure and make the world pay for its sins for betting against America.

He’s also a fan of energy related bonds, avoiding equities in the space due to the specter of dilutive share offerings.

“We see a lot of people that are on alert, but there haven’t really been any signs of recession from either the economic data, the surveys or our individual conversations with companies,” Loeb said Friday in a conference call held by Third Point Reinsurance Ltd. “We’ve actually increased our net exposure over the course of the month as some of these selloffs have created silly prices for securities.”

“The value of reducing volatility, aside from lowering the blood pressure of our team and our investors, is it really gives you the opportunity” to make long-term bets on underpriced securities, he said. Investors who are hedged against declines can “go in and make opportunistic acquisitions and purchases, which is exactly what we’ve been doing.”

Loeb, who’s known for pushing for corporate shakeups, said he’s turned his focus away from seeking targets for activist campaigns. Companies have been improving operations and creating capital structures that are favorable to shareholders, he said.

“Boards are holding the management teams more accountable, they’re getting a lot of pitches from bankers,” he said. “We’re really focusing on securities that are undervalued, where we can make investments and be constructive and not have to take any confrontational role with management teams.”

Loeb said he remains confident in health-care, industrial and consumer stocks and highlighted a recent investment in insurer Chubb Ltd. The money manager expects over-leveraged companies in cyclical sectors to face “some peril,” though investors may be able to profit from energy if they pick their holdings carefully, he said.

“We’re watching the energy markets very, very closely. We think that the better opportunities are on the credit side than on equities, as far as discounting potential bad news ahead,” he said. Energy stocks face the risks of high debt levels and “now the threat of equity offerings to shore up the balance sheets.”

Loeb’s corporate credit book lost 3.8 percent in the fourth quarter, hurt by energy-related holdings. He said Third Point may add to corporate bond positions this year as he looks to diversify the fixed-income portfolio beyond residential mortgage holdings. His largest sovereign position, in Argentine government debt, helped returns, he said.

Dan’s publicly traded reinsurance arm, TPRE, which is fueled by his investment acumen, has been a complete joke since coming public– down 18% over the past 3 months.

Cramer muses over the economy, in its never-ending quest to root out and vanquish all speculators. Some companies are doing much better than others, some for reasons that remain a mystery. At this point in the cycle, so many years removed from the ‘great recession,’ Jim, melancholically, ponders the prospect of having been ramshackled– to rack and ruin– in a market that acts like its enduring the pangs of a depression.

Dow futures are +114.

I haven’t the slightest idea what the hall of mirrors Sunedison resides in is all about, with all of their shell companies and subsequent ‘deals’ they seem to concoct. I do know, however, that David Tepper isn’t too happy about the whole ordeal and how Sunedison gimps Terraform out in an egregious display of self-interest.

Nevertheless, the courts have spoken. D. Tepper must shove a hammed sandwich into his mouth now, and quit haranguing the good folks over at SUNE.

SunEdison Inc said it has defeated an injunction filed by David Tepper’s Appaloosa Management on its TerraForm deal.

The company on Thursday said it was “gratified” after the Court of Chancery in Delaware denied Appaloosa’s injunction to prevent SunEdison’s yield co, TerraForm Power Inc, from buying some of Vivint Solar Inc’s assets.

TerraForm is to acquire Vivint’s residential solar rooftop portfolio for $799 million after SunEdison completes the Vivint transaction.

Appaloosa has repeatedly said TerraForm’s acquisition of Vivint’s assets, which had an initial purchase price of $922 million, was not in the interest of the yield co’s shareholders, mainly because it would alter the company’s business model and force it to take on debt of $960 million.

Although SUNE might still go belly up one day, possibly soon, the shares have moved firmly higher these past few days, in a very joyous, yet belligerent, manner.

Prepare yourselves for the largest rate hike you’ve ever seen. This 1.0% growth might just force the Fed to enact an emergency rate hike of 100bps to get this fucking tiger of an inflation rate under control.

Thus far, efforts by the American central bank to reign in this Zimbabwe like inflation has been futile.

SPY futures have leapt forward from +9 to +14.

Steve Liesman doesn’t think the Fed moves until James Bullard says so. Who’s the fucking Fed chief, Bullard or Yellen?

Get your rally caps ready. T. Slok from Deutsche Bank doesn’t quite understand what everyone is getting all bent out of shape about. The economy is doing just fine and the world will soon come around to the Slok-house way of thinking, pressing stock prices, inexorably, higher.

‘Markets are overly anxious over very unquantifiable worries.’

European markets are racing higher, as G20 meetings continue to tell tales of central bank intervention to succor world markets. Truth is, momentum is now on the side of the longs. Henceforth, all those who are short will now feel the lash of the true masters of this casino.

Investors will look to today’s G-20 meeting in Shanghai for indications that policy makers are still prepared to move to boost markets after the gyrations since the start of the year. People’s Bank of China Governor Zhou Xiaochuan said he still has monetary policy tools at his disposal. U.S. Treasury Secretary Jacob Lew said earlier this week that an “emergency response” shouldn’t be expected from the group.

The Germans have escaped the sausage machine and are now moving higher.

US futures are firmly higher. It appears recent gains will be increased at the open.

Copper is making the most notable move higher out of all the commodities, which should bode well for FCX.

This professor and adviser to the PBOC did an interview to remind the lot of you that, although China isn’t growing at the command economy rate of 9.8% of yesteryear, it is still growing significantly more than the pathetic European and American economies (I may be paraphrasing a bit here).

He dismisses all of this chatter about Yuan devaluation. China is the best, whether you agree or not.

This is the best blog post of the year, easily.

I love the business model. I’ll bring you public.

Here’s the perfect business idea for this environment: Open a Hundred Dollar Bill Store™. You sell hundred dollar bills for ninety dollars each. You’ll lose ten dollars per transaction but you’ll do a trillion in revenues in year one. Maybe you show an ad to everyone who walks into the store and you break even. User growth with be on the order of 1000% per month. A billion users. You’ll be the biggest IPO of all time when Goldman’s underwriters get wind of that growth rate. Go public and let someone else worry about a competitor selling hundred dollar bills for eighty-five.

In a very cynical birthday post, Josh calls for the annihilation of the Snapchat class. He wants to take away your fucking iPhones and smash them into the tiniest of pieces. He wants to make Netflix and Spotify vanish from Earth and erase all records of them from ever existing (extra Xerxes). So many of you hogs have gotten fat from malinvestment, walking about the earth in mink coats and diamond necklaces, making millions off the dumbest shit ever. The time has come for you to feel the burn of scorched earth, as the recessionary whirlwinds from the east scald your fucking faces off–reducing you into skeleton dust.

I second Josh’s call for the apocalypse. Happy birthday, player.

Groupon is the single best performing stock over the past two weeks, buoyed by news of BABA taking a stake. There have been astounding percentage gains in the commodity field these last two weeks. Overall market performance, amongst 4,000 plus stocks, is in the ballpark of 7%. The oil pipelines, however, have done much more than that.

Here are the best performers, in al sectors, over the same period. One pre-requisite applied to this screen is market capitalization must be at least $500 million.

My GARP portfolio (Growth at a reasonable price) has gained 12% these past two weeks. For those unfamiliar, it is my semi-annual managed portfolio of high growth stocks, which are trading at traditionally inexpensive levels.