Herbalife Ltd. (NYSE:HLF)‘s options are seeing an increase in activity and the buzz on the street is that activist hedge fund manager Bill Ackman is behind it. Ackman has been very bearish on Herbalife Ltd. (NYSE:HLF) since quite some time, last month he even gave a presentation in which he declared Herbalife Ltd. (NYSE:HLF) a big Ponzi scheme and its CEO, Michael O. Johnson, a predator. Scott Wapner reported on the unusual activity going on in Herbalife Ltd. (NYSE:HLF)’s options and whether Ackman is behind it or not, on CNBC, recently.
“Some big activity in the options market today around that company. Some traders wondering whether Bill Ackman is pressing his short and upping his bearish view of Herbalife Ltd. (NYSE:HLF) once again. Here is a little background, back in January of this year, someone believed by people I have spoken with to be Ackman got a boat load of bearish put options on Herbalife Ltd. (NYSE:HLF), with a $50 strike price, those were said to expire in January 2015 [...],” Wapner said.
Wapner believes that since time on those options is running out, someone who made that trade in January, bought himself some more time by rolling over his position for one more year. Wapner also reiterated that according to the experts that he has spoken to, that person is believed to be Bill Ackman. He revealed that the person making the trade increased his size and has committed $50 million to that view. Wapner mentioned that when Ackman was contacted via e-mail regarding this, he didn’t reply.
” Herbalife Ltd. (NYSE:HLF) shares have been unbelievably active since the last month or so. The day that Ackman gave that presentation, which he said was going to be a death blow for the company, the stock rallied more than 20%. It was the best day that Herbalife Ltd. (NYSE:HLF) has ever seen as a publicly traded company. Most recently, the stock has traded in the other direction, on the back of a disappointing earnings report. So, it’s been all over the place [...],” Wapner added.