Remember Herbalife? Back in December after uber-arrogant hedge fund manager Bill Ackman unveiled his short position and his bearish thesis, I pointed out how Ackman had a limited time frame for his trade to unfold. In fact, Ackman was destined to lose his bet against HLF as long as the company kept running its business, making money, buying back shares, and avoiding the wrath of regulators. Thus far that is exactly what has happened, and this morning Ackman must be feeling especially uncomfortable as the short squeeze is set into full motion:

HLF

With 31% of the shares still short (20% via Ackman alone) I believe HLF could easily hit its previous all-time high simply on the fuel of short covering. Eventually once Ackman has capitulated another epic trade setup will present itself: Shorting an over priced multi-level marketer without a large short in the shares.

The recent volume in HLF does not indicate that Ackman has covered any of his position, so the story is likely just beginning to become interesting again...

 

Related: Herbalife long Carl Icahn has changed his tune with regards to Ackman, saying at a CNBC conference yesterday, "I like Bill Ackman now, I turned my thinking. Any guy who makes me a quarter of a billion dollars, I like." Source.