Loeb vs Ackman - This ought to be fun to watch

[longlake95]

Dan Loeb has reported an 8% long position in HLF.

http://www.cnbc.com/id/100366431

[bmichaud]

Now THIS is hedge fund porn  8)

[PlanMaestro]

If Ackman suffers, it would be interesting to see what happens to JCP. (down 3% today.)

 

2010: buy what the government was selling.

2011: buy what Berkowitz was selling.

2012: buy what Paulson was selling.

2013: buy what Ackman is selling?

 

[Vish_ram]

Ackman already had a bad 2011 & 2012. If we have a porsche style covering, it'll be fireworks

 

The folks in Amway/Herbalife have so much lobby power. I wonder if Ackman can influence them to bring up new legislation.

 

MLM is only slightly better than a lottery in terms of who gets the money whom

[longlake95]

While I realize that not all MLM's are created equal, after a quick look at VLine, it's hard to take away the success that HLF has had. I know some who do MLM ( not HLF ), and some are very successful and others not as much. I think it's a stretch to consider HLF a total fraud and worth zero. If the products are good/great like some other MLM's products, then it's worth something. I wonder if this will prove disappointing for Ackman. I have A LOT of time for both Ackman and Loeb. If I had to put money on this one, I think i'd have to put my chips on Loeb.  ;)

[Yours Truly]

So judging from online news/blogs/etc... it's essentially Loeb/Hempton vs Ackman/Chapman and everything rests on whether the government will take action or not

[enoch01]

So judging from online news/blogs/etc... it's essentially Loeb/Hempton vs Ackman/Chapman and everything rests on whether the government will take action or not

 

Of those 4, Ackman is the only one short.

[Parsad]

Ackman already had a bad 2011 & 2012. If we have a porsche style covering, it'll be fireworks

 

The folks in Amway/Herbalife have so much lobby power. I wonder if Ackman can influence them to bring up new legislation.

 

MLM is only slightly better than a lottery in terms of who gets the money whom

 

 

While I realize that not all MLM's are created equal, after a quick look at VLine, it's hard to take away the success that HLF has had. I know some who do MLM ( not HLF ), and some are very successful and others not as much. I think it's a stretch to consider HLF a total fraud and worth zero. If the products are good/great like some other MLM's products, then it's worth something. I wonder if this will prove disappointing for Ackman. I have A LOT of time for both Ackman and Loeb. If I had to put money on this one, I think i'd have to put my chips on Loeb.  ;)

 

MLM is just a compensatory tool, like anything else...be it options, interest fee loans, bonuses, etc.  It's how it is applied and enforced, and should be exmained on a case by case basis like any overall compensatory plan.  Not all businesses applying MLM structures operate the same way.  Cheers! 

[Phaceliacapital]

Don't forget Tilson!

[Parsad]

Don't forget Tilson!

 

LOL!  Cheers!

[motownsf]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

[Parsad]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

 

Nope.  And some of the MLM players are better connected than these hedge fund managers.  Does anyone think the Van Andel and DeVos families (Amway) are just going to sit around and twiddle their thumbs?  What about successful financial institutions like Primerica that are well reserved, very profitable and have clean records?  No CEO is going to sit around and wait for fat, money-shifting, "2&20" hedge fund managers who want to destroy their reputation and their livelihood.  Cheers!

[constructive]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

 

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors.

[Parsad]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

 

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors.

 

They lose money because they did not execute on the distribution...an actual effort has to be made on the system package material provided to new distributors. 

 

A similar argument could be made that some universities are ponzi schemes...students pay fees to attend the university and receive their degree.  What if the student has paid fees for four years, fails some of their courses and does not receive a degree?  Should the educational institution be categorized as a "ponzi scheme" because the student lost money?

 

Ironically, what about failed hedge fund managers...should their businesses be deemed ponzi schemes?  As they charge 2&20 fees on other people's money, run aground, and then close their funds after realizing they will be a long ways from receiving another incentive fee.  But they are at the top of the pyramid and run away with all of the fees they've generated over the years. 

 

I like Ackman some of the time, but his hypocrisy stinks big time on this one...that Target fund was one of the stupidest things any hedge fund manager has done in some time and his investors lost a bundle.  Cheers!   

[constructive]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

 

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors.

 

They lose money because they did not execute on the distribution...an actual effort has to be made on the system package material provided to new distributors. 

 

A similar argument could be made that some universities are ponzi schemes...students pay fees to attend the university and receive their degree.  What if the student has paid fees for four years, fails some of their courses and does not receive a degree?  Should the educational institution be categorized as a "ponzi scheme" because the student lost money?

 

Ironically, what about failed hedge fund managers...should their businesses be deemed ponzi schemes?  As they charge 2&20 fees on other people's money, run aground, and then close their funds after realizing they will be a long ways from receiving another incentive fee.  But they are at the top of the pyramid and run away with all of the fees they've generated over the years. 

 

I like Ackman some of the time, but his hypocrisy stinks big time on this one...that Target fund was one of the stupidest things any hedge fund manager has done in some time and his investors lost a bundle.  Cheers! 

 

Sure, distributors lose money because they are lazy, but they also lose money because the company and its unofficial representatives lie to them about the cost structure.

 

I don't disagree with you, there seems to be plenty of public abuse in for-profit colleges and hedge funds too.

[motownsf]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

 

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors.

 

The majority of businesses fail in general. I agree that MLM isn't the most ethical industry, but MLM will exist. Do you really think the government would shut it down, forcing distributors to lose their livelihood and a lot of money in rapid fashion?

 

I think Ackman is toast in this short position, partially because he brought it upon himself by creating a public circus around an investment position. Short sellers like to do this, but many of the best short sellers don't have to, and you never read about them or their positions in the news.

[Yours Truly]

So judging from online news/blogs/etc... it's essentially Loeb/Hempton vs Ackman/Chapman and everything rests on whether the government will take action or not

 

Of those 4, Ackman is the only one short.

 

Whoops my error, Chapman is long HLF and is a 35% position

[constructive]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

 

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors.

 

The majority of businesses fail in general. I agree that MLM isn't the most ethical industry, but MLM will exist. Do you really think the government would shut it down, forcing distributors to lose their livelihood and a lot of money in rapid fashion?

 

I think Ackman is toast in this short position, partially because he brought it upon himself by creating a public circus around an investment position. Short sellers like to do this, but many of the best short sellers don't have to, and you never read about them or their positions in the news.

 

No I don't think the FTC will shut it down. I do think they are violating GAAP and the SEC should take action.

 

At this price and with these market dynamics, I might lean towards the long side too.

[constructive]

If I wasn't repelled by the business.

[fuluvu]

It is not intelligent to short any stocks, even a fraud. It is a better way to make money by investing in BRK. COSTCO or GEICO and  other businesses that provide  meaningful services to the world.

 

Charlie Munger Quote:" You are fighting a pig in the mud. You both get dirty, but the pig enjoys it."

[Guest Dazel]

 

 

Einhorn is short here to is he not?

[constructive]

 

 

Einhorn is short here to is he not?

 

He's never disclosed any position. I'd guess he had a small short position when he questioned management on the HLF conference call last year, and is not short right now.

[compoundinglife]

While I realize that not all MLM's are created equal, after a quick look at VLine, it's hard to take away the success that HLF has had. I know some who do MLM ( not HLF ), and some are very successful and others not as much. I think it's a stretch to consider HLF a total fraud and worth zero. If the products are good/great like some other MLM's products, then it's worth something. I wonder if this will prove disappointing for Ackman. I have A LOT of time for both Ackman and Loeb. If I had to put money on this one, I think i'd have to put my chips on Loeb.  ;)

 

I have a friend whose wife has been successful with pampered chef, as Ackman mentioned in the preso there are other MLMs with compensation structures that allow hard workers at the bottom to make money and work their way up. At least the way its portrayed in Ackman's preso it is near impossible to accomplish this with HLF.

 

[Yours Truly]

Interesting developments:

 

REPORT: The SEC Has Opened An Inquiry Into Herbalife

 

http://www.businessinsider.com/the-sec-has-opened-an-inquiry-into-herbalife-2013-1

 

h/t: POD

[compoundinglife]

In a high unemployment environment, do you really think this administration will go hard against the MLM industry, which is made up of self-employed lower-middle class constituents for the most part, to benefit a hedge fund manager's short position?

 

The vast majority of people who have been involved with Herbalife have lost money. The company claims that anyone who loses money is really a customer (not a distributor), but the truth is there are millions of failed distributors.

 

They lose money because they did not execute on the distribution...an actual effort has to be made on the system package material provided to new distributors. 

 

A similar argument could be made that some universities are ponzi schemes...students pay fees to attend the university and receive their degree.  What if the student has paid fees for four years, fails some of their courses and does not receive a degree?  Should the educational institution be categorized as a "ponzi scheme" because the student lost money?

 

Ironically, what about failed hedge fund managers...should their businesses be deemed ponzi schemes?  As they charge 2&20 fees on other people's money, run aground, and then close their funds after realizing they will be a long ways from receiving another incentive fee.  But they are at the top of the pyramid and run away with all of the fees they've generated over the years. 

 

I like Ackman some of the time, but his hypocrisy stinks big time on this one...that Target fund was one of the stupidest things any hedge fund manager has done in some time and his investors lost a bundle.  Cheers! 

 

I don't disagree with most of what you are saying but if there is any truth in Ackman's research then executing on distribution with HLF is near impossible because people who need to make their hurdle to get paid from people below them sell product on the market at a massive discount. So you are basically recruiting new people at the bottom to execute on a strategy that requires them to sell product for more then what the market is charging.