It was 2013 and billionaire investors and rivals Bill Ackman and Carl Icahn began to get into it over Herbalife Nutrition Ltd (NYSE: HLF). Icahn has largely been a buyer of HLF since Ackman announced his sizable short position. With his last and only other sale coming near the 2018 peak, he’s back to selling again and is liquidating an even larger amount of his holdings this time. This may be the strongest signal since 2013 to sell Herbalife.
If you were watching financial media at all in 2013 you heard about the airing of grievances by Carl Icahn and Bill Ackman. Icahn ripped Ackman publicly for revealing his marge short position in HLF. Ackman referred to HLF as a pyramid scheme and was seeking to have shorts pile on his short so that he could make a large amount of money. Icahn countered the move by getting low HLF.
Herbalife has 8.41% of its shares held by insiders. One of the company’s 10% owners is Carl Icahn. On August 12 he sold over 14 million shares and reduced the size of his position to 20.5 million shares. He had previously sold 10.5 million shares in May of 2018.
Action to Take: Icahn’s sale in 2018 was timely as the company only advanced 10% before sharply reversing lower.
Speculators may want to consider buying the 20 NOV 20 45/40 long put vertical for around $1.40 or less.