Hlf convo with sean 4.12.

14
Christian Sgrignoli
some with higher quality than others
more with the editing
i have an investment thesis that will make you cry
on herbalife
Sean O'Reilly
I'm listening
BTW
Christian Sgrignoli
i believe there is ystematic stock manipulation
Sean O'Reilly
I can't believe what happened friday
like with high frequency traders? LOL
Christian Sgrignoli
what has gone on is absolutely insane
and i believe ive pieced the puzzle together
Sean O'Reilly
is bill ackman right?
Christian Sgrignoli
i cant say this for certainty yet, but no
his thesis is wrong but he still likely will win out of it
win meaning profit
from his otc puts
and now his other puts
you're gonna love this though
this is the most interesting case
Sean O'Reilly
can WE make money here?
Christian Sgrignoli
ill let you make you're choice

Sean O'Reilly
still around?
Christian Sgrignoli
am now
Sean O'Reilly
now I'm back
so what's the deal with herbalife?
Christian Sgrignoli
ok, so i want to give a caveat first
well, more like a disclaimer, so you understand where im coming from
Sean O'Reilly
oh goody
Christian Sgrignoli
people like you and me that have very strong intution
sometimes get thoughts
which i believe are coming from our unconscious
which has vastly more information it is storing
this is how the herbalife situation came to me...after reading about the fbi/doj
suspected probe and 20/20 possible feature
Sean O'Reilly
ok
I'm on board and know exactly what you're talking about
I get little insights like that all the time
Christian Sgrignoli
i can tell
Sean O'Reilly
like with JCP and the trade I did that made a quick 10%
I KNEW it would keep going up
or with the preferred shares in bank of greece
I instantly knew it

Christian Sgrignoli
yeah
Sean O'Reilly
ok so have at it
Christian Sgrignoli
and again, i put in a good bit of research last night into ackmans reports, his
feuds with icahn, the lobbying firms hes paying, and how he restrucutred his
trade
but there is no certainty because ive yet to piece everything togeher solidly.
but so
ackman released in his 2q shareholder letter discussing he initially started
the short in may 2012
i would like to know specific date, but it was not released
if u remeber, david einhorn went on the confernce call may 1 asking
herbalife about the percent of ultimate end users
on december 20 2012 he gave speech at ira sohn and releasd his 300+ page
reseach on the short
which id like to say, similar to his most recent ira sohn conference report, is
reflexive misinformation
Sean O'Reilly
I have a friend who found the 300 page report quite convincing
but he might be a chump
ok so pause
reflexive misinformation
can you give me an example?
Christian Sgrignoli
yes
if you look at his most recent ira sohn presntation
the bottom third of it discusses how many advoccy groups and politicans are
calling for action
but they are calling for action because his lawyers and firm are giving
money to these groups and politicians
a great example is the senator from mass
markey
the person who did most of the analysis on the 300+ page report used to
work at the sentors office

Sean O'Reilly
are you serious?
Christian Sgrignoli
whats more
is that, the sentor ran recently in a special elevtion
http://votesmart.org/candidate/campaign-finance/26900/edmarkey#.U0iV58eKyXc
Sean O'Reilly
looks like an old democrat LOL
Christian Sgrignoli
look at average vs his compain recetly
here:http://www.opensecrets.org/politicians/summary.php?cid=N00000270
&cycle=2014
you see it is abnornamlly high
and if u check the campaign distibutors
there are links
and markey is the senator that has been presuring the ftc
so ackman has basically found a new way of activist investing
its brilliant
Sean O'Reilly
buying politicians
wow
Christian Sgrignoli
not just piliticnas
Sean O'Reilly
ok one question
it says he served in the House from 1976 to 2013
then the special election happened
is it not possible that the switch was the reason for the huge $$$ increase
senators are generally more powerful than congressmen
Christian Sgrignoli
youre right
but red line shows average for senators

"avg senate member rised"

Sean O'Reilly
the other thing it could be is the fact that it's a special election
anytime the parties see a unique opportunity to get a seat outside of the
normal cycle they go all out?
15 million dollars aside
Christian Sgrignoli
i dont doubt what your saying
stick with me
Sean O'Reilly
it is extremely interesting that ackman does appear to be buddies with this
guy
Christian Sgrignoli
its just a piece
his shareholder letter states the trade can work in two ways
catalyzd by ftc or the firms sales droping by people bying less
he is doing both
if you search in google
his "truthaboutherbalife.com" comes up first
but this is the thing
he stated when he was intially talking to media about the short
that categorically it was a pyramid scheme
but he trimmed his short
or rebalnced it
to what he said to be long-term puts
well idk when the otc puts expire
but the non otc puts expire in 2015
so i think he generated short interst, with the plan of creating a catalyst
and to resture to profit off of it
whats more is that i think him and icahn are working together
icahn is about to get three board seats
Sean O'Reilly
whoa whoa whoa
icahn supposedly HATES ackman
???

Christian Sgrignoli
this is bullshit dude
noone is thinking deep
these guys are fucking hedge fund savvy
with billions of dollars
you think they just go on cnbc and talk about shit
have emotion rants?
that doesnt happen unless there is a real reason
Sean O'Reilly
interesting
ok go on
icahn is about to get board seats
Christian Sgrignoli
and he was able to buy the stock cheap
owns now about 15%
i think they teamd up
so that ackman would take some loss, then resturcure
while carl would get cheap shares
and carl would pay ackman back
with the puts
there is a decent amount of speculation that the otc puts-icahn is on the other
side
i think its icahns cost of doing business
Sean O'Reilly
that last point
that icahn is on the other side of the puts
where are you getting that?
the speculation
Christian Sgrignoli
it was my speculation, but zero hedge wrote an article, where the author
discussed that it was a decent probability
because there are not many others that could do such a trade
but even if we step back
the pyrymid thesis fulcrum is that the end user gets hosed
but the company has stated publically that 90% of end users are customers
and the sec has investigated

nothing
so i think they keep engineering news stories
Sean O'Reilly
to play with the stock price?
Christian Sgrignoli
there will prob be more to come saying "ftc worried about hlf"..
yes
so that ackman wins on his puts
and carl accumulates shares at good price
maybe tenders at some point
Sean O'Reilly
unreal
this is somethign worse than insider trading
this is what they did 130 years ago when the stock market was just forming
Christian Sgrignoli
its sick cuz ackman restructures with the puts, while he has direct access to
sentors who are writing to ftc
yea
i ahve alot more info
these are just broad strokes
but what i would do
Sean O'Reilly
so you would buy puts now
and then when the price gets low enough
buy the stock
Christian Sgrignoli
there are dif ways to play it
i need to continue doing more research
but yea if im right
there will be some event, such as the 20/20 show that may come out
that will continue to drive it lower until ackmans puts are itm
then when he sells, i think the ftc will say everything is ok
Sean O'Reilly
if you had to guess

what price would that be at?

Christian Sgrignoli
and it will go up
well his exchange puts expire jan 2015 and at $50 and somehwere alittle
higher han $50
bought for around $7
there will prob be some leak from some annonys source
just like what happend yesterday on doj and fbi
stating "ftc about to released herb info"
Sean O'Reilly
right
Christian Sgrignoli
but they may not go itm
but thats when he will sell
and i expect him to prob cover as well
but yea
for us
Sean O'Reilly
wow
go on
Christian Sgrignoli
possibly buy puts now
buy calls abit later
but i need to do more research
to be confident on any timing
of this nature
possibly just buy calls when they are cheap
when the last of the bs media is coming out
sometime prob later in 2014
or you could just buy shares like stiritz did
not think to much into the timing
but i dont think its just icahn and ackman
i think it could involve alot of the hedge fund guys in it
these guys get together and have "idea sssions"
Sean O'Reilly

soros was probably in on it

Christian Sgrignoli
so answer how ackman stated that his team put in a year of research into the
300+ presenation and he started buidling his short right when einhorn came
on the call
Sean O'Reilly
or more accurately one of his lietenants
Christian Sgrignoli
yea i think so
Sean O'Reilly
that's why they went long herbalife
Christian Sgrignoli
yeah
but thats tough to proove
him and loeb may have just analyzed the situation
but i would guess that they had an inside track
primarily because there is all this media shit, like the vanity fair article on
how loeb and ackman are no longer friends
Sean O'Reilly
wow
Christian Sgrignoli
as to cover up and not make people think
make people automaticly say "well these ppl hate eachother"
man, its money
these guys didnt get to where they are by being overly emotional
Sean O'Reilly
hmmmmm
Christian Sgrignoli
gotta look at media as contrarian indicators
Sean O'Reilly
dude if you're right about this

omg
Christian Sgrignoli
who do you think gave the info for the vanity fair article..?
the media has no baclash, they can say whatever bs they want
why wouldnt it be a tool to misinform and profit
been done since reuters
when thomas reuter went to nathan de roth with a plan
yeah im gonna do a long thourough analsis
if you want to help im all for it
it could be the analysis that could really help break into the industry...if im
right
its sick when you really analyze news articles that come out. you see the
blatent attempt to misinform
for isntance
a recent article, that had a clear negative bias, stated that "three indpendent
board members are leaving once the term expires. this is likely because the
ftc is going to bring charges"
when in reality, icahn owns 15% and he is just nominating his 3
Sean O'Reilly
interesting
wow dude
you should just make a timeline
with the releases of each article
and in the background an herbalife chart
Christian Sgrignoli
yea ill do something like that for sure
do you know the publi disclosue requirement for covering a short?
Sean O'Reilly
not at all
Christian Sgrignoli
ackman could be covering slowly throughout the time
and it would uniliky be o media