Herbalife Gains After Concern Abates That Icahn Is Selling

(AT Express) – Herbalife Ltd. (HLF) shares rose the most in two months, recovering some of the ground they lost yesterday when investors became concerned the company’s biggest backer was selling his stake.

 

Shares of the embattled nutrition company climbed 9.6 percent to $44.09 at the close in New York, marking the biggest one-day gain since July 22. The stock had plunged yesterday amid speculation that billionaire Carl Icahnwas winding down his investment.

 

Charles Gasparino, a reporter for Fox Business, helped lift the shares in extended trading yesterday when he wrote on Twitter that Icahn hasn’t sold his stake. The stock had dropped 10 percent during regular trading.

 

Icahn is the highest-profile supporter of Herbalife, pitting him against fellow billionaire Bill Ackman, who has called the company a pyramid scheme. Herbalife’s other major shareholders include Soros Fund Management LLC, Richard Perry’s Perry Corp. and William Stiritz, according to data compiled by Bloomberg.

 

Icahn, whose firm owns an almost 19 percent stake, didn’t respond to a request for comment. Julian Cacchioli, a spokesman for Los Angeles-based Herbalife, declined to comment.

 

Ackman’s Campaign

 

After making an initial $1 billion bet against Herbalife, Ackman’s Pershing Square Capital Management LP is trying to profit from a drop in its share price. Ackman has spent $50 million on a two-year campaign to shut down the company.

 

Ackman claims that the business misleads distributors, misrepresents sales figures and sells a commodity product at inflated prices. The Federal Trade Commission and law enforcement have been investigating the allegations. Herbalife, which sells products in more than 90 countries through a network of independent distributors, has repeatedly denied Ackman’s assertions.

 

Icahn — who has a net worth of $23.6 billion, according to the Bloomberg Billionaires Index — has served as a counterbalance to Ackman. The billionaire disclosed a stake in Herbalife early last year and has become increasingly involved with the company. That includes naming five directors to the board.

 

Bloomberg

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