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Icahn Goes to Bat for Herbalife

Michael Teague  |

After a month of controversy, one of the most well-known investors reveals the amount of his shares in the company and discloses his intention to meet with management to discuss the future.

The highly unprecedented and publicized feud between high-profile investors Carl Icahn and William Ackman over allegations about the business practices of the company Herbalife (HLF) simply refuses to be drowned out.  The controversy was stirred back up as Herbalife’s shares leapt 22.5 percent during afterhours trading on Thursday, fueled by the revelation of Icahn’s 12.98 percent stakeholder position in the nutritional supplement company.

The two had a rather acrimonious exchange on CNBC last month in response to a December incident in which Ackman told a room full of investors that Herbalife was a pyramid scheme, against whose stock he would be taking a short position. Ackman’s accusations were not the first, but they did contribute to a very tumultuous period for Herbalife’s share price, which in turn embittered an already unfriendly relationship between him and Icahn.

Herbalife and Icahn have been on the defensive since January, when the company released a statement defending its business practices and dismissing the allegations, and doing the same during a meeting with investors and analysts.

Icahn had previously been unresponsive about the amount of his holdings in the company, but the 12.98 percent figure was revealed in a regulatory filing that also indicated Icahn’s intention to meet with Herbalife’s management with the intention of discussing means of increasing shareholder value as well as strategies in the wake of recent allegations, and even includes the suggestion of taking the company private. Shares of Herbalife spiked over 20 percent in after hours trading when Icahn's position was disclosed.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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