hlf

The saga of Herbalife continues. Six weeks ago I wrote about Ackman battling against Soros and Icahn, with Herbalife being stuck in the middle. Is It Time To Buy Herbalife (HLF)? The Saga Of Giant D#$*s And with the stock being up over 12% since then, the fun is just getting started.

Ackman says shutting Herbalife down is key to him

I have argued before that Ackman should have never dragged his short position into the court of public and judicial opinion. That is a big no no for any short seller and his Sin #1. And his Sin #2? Making a personal crusade out of the whole thing.

William Ackman, who has spent more than two years accusing Herbalife Ltd of running a pyramid scheme, said on Monday that shutting down the company is “one of the most important things” he can do.

This is important for a few reasons. First, Herbalife’s (HLF) stock broke out of its first resistance level. Suggesting that it wants to test its secondary resistance level at around $55. Probably soon. Second, Ackman is too committed to a particular outcome and 99% of the time this backfires. Finally, with Soros and Icahn on the opposite side of the trade, it is highly probable the stock will break out once this “witch hunt” goes away.

All in all, the likelihood of Herbalife’s stock pushing higher this year is very high.