Herbalife Ltd.
做空

On short squeezes and market overreactivity

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Herbalife's got about a 18% short interest out of the floating (shortsqueeze.com)
P/E ratio is reportedly greater than 35 (NYSE avarage is about 25, with an historical avarage level of about 20)

White circles depict unsuccessful short session that led to short squeezes; red circles depict successful short session.

These periodicity is really dictated by corporate action (stock buybacks specifically) that has greatly driven prices to actually outperform its index.
It is really freightful to short this shit now, given how its beta (~0.2) reacted to the whole market (poorly) making this stock actually a great investment throughout the last months. Can this continue? Not sure. Surely, the overall equity market is now a bit bearish and in these circumnstances linear correlation tend to higher levels (hence raising betas and aligning perfomances within the index).

Technically speaking the stock is overbought.

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