Herbalife Quotes

Which meant, if somehow GameStop did start to go up, the people who had shorted the company would begin to feel pressure to buy; the more the stock went up, the heavier that pressure became. As the shorts began to cover, buying shares to return them to their lenders, the stock would rise even higher. In financial parlance, this was something called a 'short squeeze.' It didn't happen often, but when it did, it could be spectacular. Most famously, in 2008, a surprise takeover attempt of the German automaker Volkswagen by rival Porsche drove Volkswagen's stock price up by a factor of 5 — briefly making it the most valuable company in the world — in two quick days of trading, as short selling funds struggled to cover their positions. Similarly, a battle between two hedge fund titans — Bill Ackman, of Pershing Square Capital Management, and Carl Icahn — led to a squeeze involving supplement maker — and alleged pyramid marketer — Herbalife, which cost Ackman a reported $1 billion. And perhaps the first widely reported short squeeze dated back a century, to 1923, when grocery magnate Clarence Saunders successfully decimated short sellers who had targeted his nascent chain of Piggly Wiggly grocery stores.

Money changes everything. In Billionaires, a book by political scientist Darrell West, one member of the three-comma club brought up his “get-a-senator” strategy—a handy tactic, given that a lone senator can block objectionable legislation or pull strings on a favored donor’s behalf. West recalls how Senator Rand Paul held up Senate action for years on a treaty that would have forced Swiss banks to reveal the names of twenty-two thousand wealthy Americans who had assets stashed in overseas accounts, presumably to evade taxes. (An invasion of privacy, Paul insisted.) In another case, a billionaire hedge fund manager persuaded Democratic senator Edward Markey to write a letter to the SEC calling for an investigation of Herbalife, a multilevel marketing company the financier suspected of fraud, and whose stock he also happened to be short-selling. The effort paid off. After Markey’s letter was made public, Herbalife’s share price plummeted 14 percent.