Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
We spoke about the issue with David Einhorn getting on the Herbalife (HLF) conference call a few days ago. Some people tried to ‘catch a bottom’ in the stock since it had fallen so much. I cannot stress enough how this guy is respected as a short seller and even IF HE WAS EVENTUALLY WRONG it does not matter – it will cause panic in the stock and more importantly OTHER INSTITUTIONS to attack. This is playing out. Further, yesterday’s disaster in Green Mountain Roasters (GMCR) – another Einhorn target – is “piling on”. Yes, eventually this stock is going to have a massive oversold bounce … and for all I know there is not one issue with the business. But none of that matters in the near term – no reason to be a hero when there are thousands of stocks out there.
HLF has now given back the entire October-April run in 3 sessions. For those who use support levels, I would assume some people try long side bets against that long term support. Have fun 
That said, it is scary to think that your stock can drop 20% in a minute if David Einhorn gets on a conference call – it can happen at any moment to any stock.
