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August 1, 2013  Thu 8:14 AM CT

HLF: SEE CHART GET CHAIN FIND STRATEGIES
Let's face it: This whole Herbalife thing is a charade. Many of the people buying the stock don't know anything about the company. Many don't care about the fundamentals or don't know about the point system and how Herbalife would prefer that you value the company on a point-per-share basis, not earnings per share, because Herbalife wants you to use the metric of sale points to grade the company. I bet most of the people buying Herbalife right now have never tried the product and never met anyone who has sold it.

They are doing it to break Bill Ackman, who has to be the most hated guy on the Street since Gordon Gekko tendered for Teldar. They are trying to force Ackman to cover his Herbalife short or to get his brokers to buy him in through a short squeeze, and don't doubt this for a minute. It started with Carl Icahn and his legendary on-air spat with Scott Wapner on CNBC. But it has now escalated to a free-for-all against Ackman, betting that he can't bring his short in and that the Federal Trade Commission won't shut this stock down to get to Ackman's zero price target.

You know what's a shame? That somehow the football has become Herbalife, which actually reported a good EPS number, despite the "Ackman defense per share" line that Herbalife broke out. The revenue growth and cash-flow growth were terrific. If somehow the company could get audited financials, then I think it would be able to lever up and buy a ton of stock back, maybe even through a well-above-market Dutch tender.

TheStreet.com logoHowever, what's really needed is an Ackman future, not Herbalife common stock. These hedge funds all really want to bet for or against Ackman, and it seems that the best way to do that is to take into account more than Herbalife. He won't have to cover unless there is a short squeeze, if he keeps hitting it out of the park with stocks like Procter & Gamble and Canadian Pacific. His investors won't care about their exposure to Herbalife if they made a ton of money in Air Products just by Ackman going after the company. Who cares about Herbalife if that's the case?

You see that the way that Herbalife's investors make money is to break Ackman. The way that Ackman makes money is to break Herbalife. But Herbalife the stock? Let's be honest: It has become an irrelevance.

Now I don't expect an Ackman future anytime soon, but I think it is only fair to say that Ackman has had some big wins to go with his losses like this and J.C. Penney, and without the whole panoply, I do believe that Herbalife is a ridiculous proxy for Ackman's fund, which is what these people are betting against.

You get me an Ackman ETF with puts and calls? Then we got something to invest in or short. Until then, I don't like Herbalife as a vehicle to bash or buy Ackman. It just doesn't have enough correlation.

But boy, oh boy, is it fun!

Disclosures: Cramer has no positions in the stocks mentioned.
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