Home » Health » Icahn raises his stake in Herbalife Ltd. (NYSE:HLF)

Billionaire and activist investor Carl Icahn has raised his stake in nutrition products supplier Herbalife Ltd.(NYSE:HLF) with the purchase of an additional 2.3 million shares, a securities filing showed.

The total number of Herbalife shares in his portfolio has risen to 16.4 million, the filing showed.

Icahn has taken a bullish stance on the stock in opposition to hedge fund manager William Ackman, who has publicly proclaimed his distrust of the company, which he claimed, was running a pyramid scheme.

Icahn and Ackman had a war of words on CNBC earlier this year. Ackman-run Pershing Square Management holds a huge stock position in Herbalife and a presentation made by him on the company last year brought down the shares of the company to $26 from $40, though the stock has recovered now.

Icahn has announced that he plans to explore a number of strategic options with Herbalife management, including a takeover.

Ackman’s short position on the stock is based on a premise that regulators would be forced to investigate the company and reveal its true intent. Ackman has argued that over time distributors will be forced to leave the company.

On the other hand, those who are bullish on the stock and stand by its business model say that the stock is trading at 10 times its trailing earnings. Its revenues have also been growing at double digits every quarter.

Apart from Icahn the other major investor who is bullish on Herbalife is Dan Loeb of Third Point, which reported a position of 8.9 million shares in the company, or 8.2 percent of the total shares outstanding.

 



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3 Responses to “Icahn raises his stake in Herbalife Ltd. (NYSE:HLF)”

  1. I’m 100% positive that Herbalife is not a pyramid scheme. Their products are legitimate, and they actually work. I use them ALOT lol.

    Reply
    • Chris M March 18, 2013

      Whether or not the products work isn’t the point. The point is whether the company takes in the vast amount of revenue from recruitment- the products here acting as a proxy for recruitment fees and usually sold by distributors below cost.

      Reply
  2. Icahn thinks having more money makes him right, but in this case he’s wrong. Herbalife IS a pyramid scheme, and its products are like speed. They made my wife crazy and almost cost us our marriage.

    Reply