Twas The Night Before Herbalife – An Original

Twas the night before Herbalife (‘s analyst day), and all though the lair,

not a creature was comfortable – not a bull, nor a bear.

Positions were taken, options spreads booked with glee,

The day’s action was ludicrous, risk-avoiders did flee.

x

Hedgies had worked to position exposures,

Praying regardless, that at least we’d have closure.

On Ackman! On Hempton! On Loeb! On Chapman!

I need a borrow – can’t get one? Oh Crap, Man!

x

When out on the interwebs, arose such a clatter -

What’s this? SEC investigation?  Why? What’s the matter?

Sell orders flooded in, overwhelming the buyers,

But the bulls returned quickly to take a flyer.

x

Then, again the stock plunged, and just as quickly rebounded,

Surely it looked like the shorts would be hounded?

By their brokers to recall the stock that’d been lent,

So out of shape, portfolios didn’t get bent.

x

Volatility buyers were clinging to prayer,

that whatever was said would ignite the air.

Sellers of vol, though, were singing the tunes

Of “buy on the rumor, and sell on the news.”

x

And just when we thought that the saga’d been written -

Wait, who’s this guy, he seems smart – I’m smitten:

Never forgotten, after causing a stir,

It was DAVID EINHORN! returning, dashing in with a blur!

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Word quickly spread, that Einhorn had arrived,

Stock was halted, limit down – how would longs survive?

Einhorn stepped to the mic, hush covered the room,

awaiting what sure would be Herbalife doom.

x

The young brown-eyed assassin cleared his throat and then spoke,

Herbalife’s lawyers passed out, then awoke.

“Gentlemen, I just want to say: what a journey,

It’s occasionally looked like you might need a gurney.”

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“But despite all the guessing about my position,

I have none – no interest – not even a smidgen.

I wish you all luck, all my hedge fund pals too,

Though one of you’s gonna see PnL poo.

x

“This seems like as good as a time there will be,

to remind everyone listening: don’t listen to me!

DO YOUR OWN WORK – investigate, don’t follow,

and you won’t get stuck in a thesis that’s hollow”

x

And with that, Einhorn dropped the mic and reversed,

Leaving the theater, his exit rehearsed.

Analysts immediately went to their phones,

“EINHORN’S NOT INVOLVED – WHAT TO DO? WE’RE ALONE!”

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A murmur spread quickly, through the rows of seats,

Identifying a Pyramid was no easy feat.

Would the FTC step in, put a stop to the sales?

Or would business continue – an MLM whale?

x

At the end of the day, there was little more clarity,

No clue how much Ackman would be giving to charity.

The FTC’s grey areas made it all murky,

The stock, it seems certain, will be hurky-jerkey.

x

So is it or isn’t it – an illegal scheme?

The Greatest Pyramid that the world’s ever seen?

And what is the mix of recruiting vs. retail?

Sales to end users – other such details?

x

Will the Government act, on behalf of distributors

Or will they move on to more evil  contributors?

One thing is certain, this much is known:

We’ll be eagerly waiting for the next Ira Sohn.

-KD

disclosure:  long $HLF Jan call spreads and put spreads. No position in $HLF common stock.

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