FTC Launches Probe on Herbalife (HLF)
Shares of Herbalife Ltd. (HLF) closed down -4.82 or -7.37 percent to $60.57 per share on Wednesday, after news that the company had received a Civil Investigative Demand or CID from the U.S. Federal Trade Commission. Trading in Herbalife shares was halted before the announcement, reopening down -8.0 percent to the $60 per share level.
The stock later recovered some of its losses during the trading session. The investigation demand by the FTC represents a major win for billionaire investor Bill Ackman, who has been actively advocating against the stock, claiming that the company is no more than an elaborate Ponzi scheme. On the other side of the ring is billionaire Carl Icahn who holds a 17 percent stake in the company.
Los Angeles, California based Herbalife Ltd. was founded in 1980 and is a multi-level marketing company selling skin care and weight loss products in 87 countries through a network of 2.7 million independent agents. The companyâ s product line includes energy and fitness supplements, protein snacks and shakes and personal skin care products. Bill Ackman, whose Pershing Square hedge fund has been hard hit with a large short position in Herbalife stock, saw a reprieve with yesterdayâ s slide. On Tuesday, Ackman presented yet another road show, against Herbalife, in which he accused the company of â
Published on Mar 13, 2014
By Jay Hawk