Presidential Ponzi

Presidential Ponzi

ponzi

With the markets closed for the President’s day, American took time off and paused to honor this iconic office. While many of us have grown disenchanted with the current state of affairs, our presidents have a rich and storied history.

From national icons to Carl Ichan, the only real market news on Friday was this battle with William Ackman over Herbalife,  cause there’s nothing like a couple of Wall Street tycoons getting in a financial pissing match.

We learned late Thursday in a filing with the SEC, that Icahn has taken a 13 percent stake in Herbalife (HLF), a supplement company that Pershing Square Capital Management, Ackman’s company has a huge short position. Ackman has repeatedly called the company a “massive pyramid scheme.”  HLF jumped more than 20 percent before the opening bell on Friday, but sold off near the close and finished only marginally higher at 38.74.

Icahn's investment came three weeks after a feud between the two men boiled over on live television, with each phoning in to CNBC and insulting each other. Classy! The two were just dredging up old wounds as their feud began a decade ago over a real estate company deal that ended up in court. Icahn was forced to pay $4.5 billion to Ackman's Gotham Partners, and he has never forgotten about it. Poor, poor billionaires.

Whether or not Ichan really thanks HLF is a good investment, one can only speculate. He did say the regulatory filing that he plans to have “discussions” with Herbalife management about business and strategic alternatives to enhance shareholder value, including the possibility of going private (READ.....Please go find some business model other than the multi-level marketing kookiness you’re passing off as a legitimate enterprise because I really hate this Ackman guy and want him blown out of the water).

Ackman, who is still heavily short HLF stuck to his guns on Friday.

"After 18 months of due diligence, we have concluded that it is a certainty that Herbalife is a pyramid scheme," he said. "Our goal was to shine a spotlight on Herbalife. To the extent that Mr. Icahn is helping achieve this objective, we welcome his involvement."

All of this is amusing for a slow market news cycle, but as for the historical relevance of their squabble, it will rank right up there with the folks still debating who was the better president, Millard Fillmore, the 13th or Franklin Pierce, the 14th?  

Trade well and follow the trend, not the perma-bull OR perma-bear "experts."

Best Trades to you,

Larry Levin

Founder & President- Trading Advantage

TradingAdvantage.com