Bullish Herbalife Analyst Makes the Case Ackman's Pershing is Covering Massive Short Position

DA Davidson's Timothy Ramey is moving shares of Herbalife

Thursday afternoon. The analyst issued a mid-day note speculating on the possibility Bill Ackman's Pershing Square is now covering its short in Herbalife. "Herbalife's short interest, which peaked at 37.2 million shares on December 31st (at a price of $32.94), fell recently to a still-huge 31 million shares on May 31st, down from 33 million shares on May 15th." Ramey insisted, "The short thesis has been thoroughly discredited and even on a day such as today, when a congresswoman asks the FTC to investigate Herbalife as a pyramid scheme, the shares are up." Ramey notes Pershing's "avoidance of any media regarding Herbalife recently, we wonder if it has been quietly unwinding its short – doing so while continuing its prior commentary on Herbalife might be conflicting – to tout a short at the same time that one is covering is tricky ground." The DA Davidson analyst called the news of a California congresswomen asking the FTC for a probe on Herbalife from late last night "welcome." DA Davidson reiterated a Buy rating and $78 price target on shares of Herbalife. The stock is up 3 percent to $46.63 at last check.