HLF Short Position Follow Up /Earnings

I don't care to get caught up in a spitting match between Carl Icahn and Ackerman, I don't care what Ackerman's knock-out presentation said about HLF, I kind of care that Icahn only added 1% to his HLF long according to his last filing, but other than that, HLF is a stock that I'm interested in for one reason and one reason openly...

It's the chart and underlying trade activity...

We recently added a little to HLF, Adding 25% to HLF Short Position ... I almost added the final 25% or so today, but I hate doing anything in front of earnings unless I can see there's a very clear probability of a leak.

In any case, HLF is down 11.4% in after hours after reporting...

AH is light blue to the right.

HLF is a poster child for the way companies have been keeping their share price up, instead of cap-ex spending they've been buying back shares, many on debt/leverage to create a sugar high rush or keep prices elevated a little longer, having nothing to do with the company's performance. I'm really not even interested in that so much, but it is a trend and HLF is a model. HLF spent about $1 bn in net debt for 2014, all cash creation and debt for 2014 has been used to buy back shares, $1.3 billon dollars so far for 2014 vs. $166 mn for the same time period during 2013. Simply said, HLF doesn't have the cash creation or the ability to absorb much more debt to keep share prices up by buying back shares and that's that.
 

 HLF daily negative divegrence in a H&S top and the 3 places I'll short a H&S top.

At "A" we have distribution and at "B" some 5 min accumulation the day before Ackman delivers his HLF knock-out blow presentation, I suspect Icahn sought to humiliate Ackman on his big day as HLF was up the most ever I believe on the day Ackman presented his evidence they were a fraud, still this was only a 5 min positive divegrence and can only go so far which has already shown distribution.

I'll be looking to add the last 25% or so to the position, otherwise I'm fine with where we are at. As of right now the HLF short is up for a  gain of +7.2%.

By the way, there are a lot of companies engaging in this sugar rush share buyback that adds no long term value to the company, no Cap-ex spending, just a gimmick to boost share prices.