From DealBreaker:
With its diet shakes and septuagenarian enemas selling so well, the folks at Herbalife have a little more time and a few more dollars to spend screwing with Bill Ackman as Bill Ackman has screwed with it.
Herbalife is approaching investors in Ackman’s hedge
fund, suggesting they pull their money from the $12 billion firm,
according to three people with knowledge of Herbalife’s strategy.
Herbalife’s argument: Ackman’s bet, which has lost as much as $500
million, is risky and irresponsible, said the people, asking not to be
named because the campaign is private.
Moelis & Co., an investment bank working for Herbalife, arranged a
meeting with Cliffwater LLC, which advises clients on hedge-fund
investments, and Herbalife executives, according to two people with
knowledge of the gathering. Moelis also reached out to New Jersey’s
$76.7 billion pension fund, which has $207 million invested with Ackman,
said the people…MORE
The title is a paraphrase of
a story I've told a few times:
When the Billionaire Hunt brothers were attempting
to corner the silver market in January 1980 the head of one of the
world's largest grain traders said "Those boys don't know what deep
pockets are".
The "commercials" had been shorting into the Hunt bros. buying and the grain trader was at the top of the "commercial" heap.
On January 21 the COMEX went "liquidation only".
On January 22 the CBOT went "liquidation only".
On Tuesday the 22nd silver closed at $34, down 27% from its close the previous Friday.
The Hunt's still had enormous paper profits but any attempt to book them would smash the markets even further.
Prices declined to $17 by March, down 66% from
the January high and the Hunt's were receiving calls of $60 Million per
day in variation margin. On March 27 the price dropped from $21.62 to $10.80 and one of their brokers, Bache, was in violation of net capital requirements and another, Merrill Lynch was on the brink.
As
the attorneys got involved over the next few years, oil prices headed
south, destroying the value of Daddy's creation (and the brother's
piggybank) Placid Oil.
Bunker Hunt filed for bankruptcy in September 1988 as did his brother and Placid.
At the time the grain trader spoke it is
probable that the various branches of the Hunt families comprised the
wealthiest "family" in America.
