Earlier today, Carl Ichan revealed that he could buy a 25% stake in the company, and Herbalife would also add 2 board of directors seats (from 9 to 11), and would appoint members from Ichan Enterprises to be on the board. With being on the board of directors you get acces to information that is not available to the general public and most importantly not available to Bill Ackamn. Carl of course would not actually go through with this proposal unless he knew in his mind 100% percent that this multi level marketing firm is NOT a pyrmaid scheme! Carl has said time and time again, that his team has done the research and can confidently confirm that. People will gain more confidence in the company as Carl has such a huge interest in the company. Buyers will soon outnumber sellers and a short squeeze is imminent. Although prior to this announcement I had no long position in the company, I am now seriously considering starting one. Smart money (Carl Ichan), is buying and he has lots of skin in the game. No one would put up such a large stake in any company without making sure they have all the facts right and is going to get a return on equity. The cherry on top is that Herbalife is cheap on almost all valuations measurements.
Currently 33 million shares short, and 3.6 days to cover! I would buy the stock just for the huge short interest, as the short squeeze reward could be massive. With Carl Ichan pumping the stock, shorts are the ones that are going to be burnt. Even if you are not as confident in the company, I would still take a small long position, just for the risk reward.
