Herbalife Shares Dip After Icahn Talks Trade, Ackman on CNBC
Shares of Herbalife (NYSE: HLF) gaped at the open on Friday, up about 20%. Noted hedge fund manager Carl Icahn revealed a 14 million share stake in the company (some of this stake through options), or about 13% of Herbalife's shares, Thursday night.
Icahn appeared on CNBC in the afternoon to discuss his investment.
“I buy things that are undervalued,” Icahn explained. “I'm in this to make money...Ackman gave me a great opportunity.”
In December, Bill Ackman revealed that he had sold short about one-fifth of the company's shares. Following his presentation, shares plummeted from the mid-$40 range into the $20s.
Icahn insisted that Herbalife is cheap, and that his investment is a great opportunity. He questioned Ackman's reasoning, saying that despite his 300-page presentation, Ackman had presented no “expert opinion.”
Yet, shares actually traded down during Icahn's interview after he suggested that his investment into Herbalife might have been based on instincts. “Some of the greatest investments I've ever made, I've never seen the company.”
But Icahn did say that he had talked to people at Herbalife, including the CEO Michael Johnson. He characterized Herbalife as being at the center of a direct-selling “paradigm shift.”
He was also skeptical that the FTC would listen to Ackman, given that he was essentially arguing that the FTC was doing a poor job.
Earlier on Friday, Ackman told Benzinga that he welcomed Icahn's involvement, explaining that it brought more light to the issues at Herbalife.
Shares of Herbalife traded near $41 Friday afternoon, up about 7%.
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