Herbalife Rises After Carl Icahn Increases Stake In Company
Herbalife Ltd. rose after billionaire Carl Icahn bought more than 2.3 million shares in the embattled nutrition company, a the high-profile target of fellow billionaire activist investor Bill Ackman.
The stock advanced as much as 3.5 percent to $62.64 in New York. Herbalife had fallen Friday after Ackman told Icahn was looking to sell his stake , not increase it. The remark led to about 10.4 million shares trading hands, or more than six hours its daily median. Icahn waited until after Fridays market close to announce that hed added 2.3 million shares to his stake.
The two investing heavyweights have been publicly sparring over the fate of the company. Ackman has called it a pyramid scheme, and his hedge fund, Pershing Square Capital Management, is nearing the four-year anniversary of its well-publicized$ 1 billion wager against the Los Angeles-based manufacturer of fitness and nutrition products.
Icahn, who raised his Herbalife stake to 21 percentage, has been on the other side of the debate since 2013. He has been publicly assailing Ackmans attempted evisceration of Herbalife — on stages, television, in documentaries and online — since a January 2013 CNBC phone-in fight. That July, Icahn told a meeting he decided to look into Herbalife because he wasnt a great fan of Ackman.
A year later at the same Delivering Alpha event in New York, both billionaires took the stage together and said their feud was over. Days afterward, Ackman delivered an emotional, nearly four-hour anti-Herbalife presentation that backfired — lifting the shares 25 percent.
Ackman sent Herbalife shares tumbling on Friday when he said Icahn was looking to ditch his constrains. In an interview with CNBC, Ackman said investment bank Jefferies Group LLC approached him about buying a portion of Icahns Herbalife shares earlier this month.
He said he considered buying some of Icahns stock if it would help get Icahn altogether out of his position. Ackman afterwards confirmed to Bloomberg News that he didnt buy any of Icahns stock and would have rapidly sold the shares if he had.
Great Model
Completely contrary to what Bill Ackman stated on television today, I have never devoted Jefferies an order to sell any of our Herbalife shares, Icahn said in his statement, in which he disclosed adding to his considers. I continue to believe in Herbalife: Its a great model that creates a great number of jobs for people.
Icahns statement — which critics noted didnt directly address whether Jefferies had softly shopped the stake for purchaser interest — went on to lambaste Ackmans fixation on the company.
Ackman may be a smart guy, but he has clearly succumbed to the same dangerous( and sometimes fatal) malady that afflicts many investors – hes developed a very bad instance of Herbalife obsession, he told. Preoccupations concerning the value of stocks are the undoing of many investors because they often blind you to the facts, and it becomes impossible to consider the wood for the trees.
FTC Settlement
Ackman maintained his gamble against Herbalife even after the maker of weight-loss shakes and supplements reached a $200 million settlement with the U.S. Federal Trade Commission last month. He said that the terms of the agreement — which Herbalife hailed as an acknowledgment that its business model was audio — would cripple the company and cause it to collapse.
Icahns response to the FTC agreement noted that he was allowed to raise his stake to as much as 35 percentage — something Ackman had previously opined wouldnt happen.
It astounds me that a guy who hasnt any knowledge of my internal investment thinking believes he is in a position to go on television to tell the world what I AM guessing! Amazing! Icahn said in Fridays statement.
He has no right to do so, and even worse, Im sure his unsubstantiated, obsessive comments, especially about Herbalife, have expensed investors a great deal of money over the last few years.
Meanwhile, Herbalife has repeatedly denied Ackmans accusations. The company declined to respond to Ackmans commentaries on Friday, though Chairman and CEO Michael O. Johnson quickly welcomed Icahns announcement.
We appreciate the support of all of our investors and are particularly grateful to Carl Icahn and the conviction he shares, and continues to show in our business, as demonstrated by todays significant increase in his stake in the company.
Read more: www.bloomberg.com
Herbalife Rises After Carl Icahn Increases Stake In Company
Herbalife Rises After Carl Icahn Increases Stake In Company
Herbalife Rises After Carl Icahn Increases Stake In Company
Herbalife Rises After Carl Icahn Increases Stake In Company
Herbalife Rises After Carl Icahn Increases Stake In Company