Unusual Options Activity Tue 10/10/23

The following options are exhibiting notable trading, potentially indicating changing sentiment toward the underlying stocks, and/or potentially representing positioning for increased volatility.

Bullish Call Activity:

• PLUG Oct 7 calls are seeing interest with the underlying stock up 11% (volume: 11.8K, open int: 7370, implied vol: ~99%, prev day implied vol: 93%). 1000 contracts traded in a single transaction. Co is expected to report earnings early November.
• HLF Nov 17.5 calls (volume: 5560, open int: 0, implied vol: ~76%, prev day implied vol: 70%). 4100 contracts traded in a single transaction. Co is confirmed to report earnings November 1 before the open.
• STNE Nov 12 calls are seeing interest with the underlying stock up 5% (volume: 3010, open int: 10, implied vol: ~52%, prev day implied vol: 48%). 3K traded in a single transaction. Co is expected to report earnings mid-November.
• JBLU Oct 5 calls are seeing interest with the underlying stock up 4% (volume: 2260, open int: 500, implied vol: ~12%, prev day implied vol: 10%). Co is expected to report earnings late October.
  

Bearish Put Activity:

• SAVE Jan24 15 puts (volume: 1860, open int: 40, implied vol: ~120%, prev day implied vol: 99%). Co is expected to report earnings late October.
• JOBY Apr24 6 puts (volume: 2050, open int: 0, implied vol: ~68%, prev day implied vol: 65%). Kerrisdale Capital is short JOBY; "In its path to almost certain failure, it's going to incinerate billions of investor capital or just go bust." Co is expected to report earnings early November.
  

Sentiment: The CBOE Put/Call ratio is currently: 1.08, VIX: (16.71, -0.99, -5.6%).
October 20 is options expiration -- the last day to trade October equity options.

-=Herbalife Nutrition (HLF) reported earnings on Tue 29 Oct 2019 (a/h)

Herbalife Nutrition reports EPS in-line, beats on revs; guides Q4 EPS in-line, revs below two analyst estimate; issues FY20 guidance

Reports Q3 (Sep) earnings of $0.73 per share, excluding non-recurring items, in-line with the S&P Capital IQ Consensus of $0.73; revenues rose 0.1% year/year to $1.24 bln vs the $1.21 bln two analyst estimate.

Co issues guidance for Q4, sees EPS of $0.52-0.72, excluding non-recurring items, vs. $0.69 S&P Capital IQ Consensus; sees Q4 revs -0.9% to +4.6% to ~$1.175-1.187 bln vs. $1.22 bln two analyst estimate.

Co issues mixed guidance for FY19, sees EPS of $2.89-3.09, excluding non-recurring items, vs. $2.72 S&P Capital IQ Consensus; sees FY19 revs -1.2% to +0.1% to ~$4.833-4.897 bln vs. $4.93 bln two analyst estimate.

Co issues downside guidance for FY20, sees EPS of $2.70-3.20, excluding non-recurring items, vs. $3.21 S&P Capital IQ Consensus; sees FY2020 rev growth of 1.0% to 7.0% yr/yr.

BoDs also announced that John Agwunobi, Co-President and Chief Health and Nutrition Officer, will become Chief Executive Officer, effective March 30, 2020. At that time, John DeSimone, Co-President and Chief Strategic Officer, will become President. Michael Johnson, who is serving as CEO on an interim basis, will remain Chairman of the Board of Directors.

-=Herbalife plans name change, stock split, more share repurchases; Ackman exits bet against company

The share price of Herbalife Ltd. jumped to an all-time high in trading Wednesday in reaction to the company’s proposals of conducting a 2-for-1 split of its stock and expanding its share purchase program by $450 million to $650 million.

The company also plans to change its corporate name to Herbalife Nutrition Ltd., “reflecting the company’s growing leadership and expertise in the field of nutrition.” Herbalife Nutrition has been used recently as a brand for its products.

Also on Wednesday, billionaire hedge-fund activist Bill Ackman told cable business news CNBC that he had ended his $1 billion bet against Herbalife that began on Dec. 19, 2012.

****


Arguing that the company was a pyramid scheme, with an intrinsic value of zero, Ackman entered into a short position worth $1 billion in 2012. The trade has been chronicled at length by almost every financial news outlet even to this day and was famous for an on-air argument between Ackman and Carl Icahn on CNBC, who amongst other major hedge fund players had taken a long position in the stock. In the weeks following his short position, Ackman saw Herbalife's shares plunge around 60 percent, but the company has proven remarkably resilient, and has rebounded to its pre-short levels, thus costing Ackman millions in borrowing fees, and paper losses. As of February 28, 2018, Ackman has reportedly exited his entire short bet on Herbalife.

=Herbalife (HLF) starts buybacks after going-private talks fall through

Herbalife commences 'modified Dutch auction' self-tender offer to purchase for cash up to an aggregate of $600 mln of shares of its common stock at a per share price between $60.00-$68.00; discloses recent unsuccessful going-private discussions

For each share tendered, shareholders will also receive a non-transferable contractual contingent value right allowing participants in the tender offer to receive a contingent cash payment should Herbalife be acquired in a going-private transaction within two years of today's commencement of the tender offer.

• The Herbalife Board of Directors has determined the tender offer, which includes a combination of a cash payment and a CVR for each share, is an appropriate way to return capital to shareholders that seek liquidity under current market conditions while, at the same time, providing such tendering shareholders potential additional value in the event Herbalife is taken private within two years.
• Specifically, the Company was recently in discussions with a prospective financial investor regarding a potential transaction that could have led to the Company being taken private. While these conversations were formally terminated on August 16, 2017, because these discussions contemplated the possibility of the Company being taken private, the Board of Directors decided to provide tendering shareholders with some protection in the event the Company is taken private within two years resulting in remaining shareholders possibly receiving a higher price than paid in the self-tender.
• In connection with the tender offer, Carl Icahn and his controlled affiliates that own Herbalife shares and Herbalife entered into an agreement with the Icahn Entities on August 21, 2017 pursuant to which the Icahn Entities agreed, among other things and for the two years following commencement of the tender offer, to not increase their aggregate beneficial ownership above 50% of Herbalife's outstanding common shares unless they have agreed to acquire 100% of its outstanding common shares

Demonstrating their commitment and belief in the long-term success of Herbalife, members of the Board of Directors, Herbalife executive officers and Carl Icahn, the Company's largest shareholder, have all advised that they do not intend to tender shares into this tender offer.

=Herbalife (HLF) reported earnings on Thur 4 May 2017 (a/h)

GEORGE TOWN, Cayman Islands (AP) _ Herbalife Ltd. (HLF) on Thursday reported first-quarter earnings of $85.2 million.

The George Town, Cayman Islands-based company said it had net income of 98 cents per share. Earnings, adjusted for non-recurring costs, came to $1.24 per share.

The seller of supplements and weight-loss products posted revenue of $1.1 billion in the period.

For the current quarter ending in July, Herbalife expects its per-share earnings to range from 85 cents to $1.05. Analysts surveyed by Zacks had forecast adjusted earnings per share of $1.07.

The company expects full-year earnings in the range of $4.05 to $4.45 per share.

Herbalife shares have climbed 29 percent since the beginning of the year. In the final minutes of trading on Thursday, shares hit $62.20, an increase of slightly more than 7 percent in the last 12 months.

Herbalife (HLF) confirms settlement with the FTC

• FTC has deemed it is not a pyramid scheme. Co agrees to adjust some of its business practices and co's board to allow Carl Icahn to acquire up to 34.99% of outstanding shares.
• Herbalife also agreed to make a $200 million payment to the FTC as part of the settlement.

Herbalife confirms settlement with the FTC, says the agreement does not change its business model as a direct selling company; agrees to make $200 mln payment; Board moves to allow Carl Icahn to acquire up to 34.99% of outstanding common shares:

The co confirms it has reached a settlement agreement with the Federal Trade Commission resolving the FTC's multi-year investigation of the Company. The terms of the settlement do not change Herbalife's business model as a direct selling company and set new standards for the industry. With the settlement agreement announced today, the FTC's investigation of Herbalife is complete.

• Herbalife and the Illinois Attorney General also reached a settlement, and the Company agreed to pay $3 million as part of this separate agreement. With the conclusion of the Illinois investigation, the Company is not aware of any active investigations by any other state attorney general.
• The Board unanimously approved the settlements and voluntarily established an Oversight Committee of the Board that will ensure full compliance with the terms of the agreement.
• The terms of the settlement apply only to the Company's sales in the U.S., which comprise approximately 20% of total net sales. As part of the settlement, the Company agreed to new procedures and enhancements to some policies that already exist. Many of the terms agreed to were either already being contemplated by the Company or are extensions of practices already in place and will be implemented over the next 10 months. The two primary components of the agreement are:
  • Those who currently have a membership with Herbalife, and those coming into the business, will be categorized as either a preferred member (those who become a preferred member to purchase products at a discount) or distributor (those who choose to build a business and sell products through direct sales). This will allow Herbalife to better track both groups and provide a personalized experience for these individuals.
  • Distributors will be compensated based upon retail sales and will provide receipts for their transactions. Their compensation will also be based on purchase for personal consumption within allowable limits. Herbalife's independent distributors are currently required to keep sales transaction receipts. With advancements in mobile technology, tracking retail sales is now even easier, and the Company has already developed proprietary technological solutions including a mobile application in the U.S. to make the process as efficient and easy as possible.
• Other terms agreed to include enhancing training provided to distributors; requiring a business plan and a one-year waiting period before opening a nutrition club; extending the amount of time a distributor may return an initial membership pack; paying for all shipping costs associated with any returned products; prohibiting auto-shipment of products; auditing by an independent third party; and extending the protections on income claims including greater specificity around lifestyle claims.