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Herbalife Discloses FTC Demand for Civil Investigation, Shares Nose Dive

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Shares of Herbalife (NYSE: HLF) are under attack Wednesday afternoon as the company announced it received a civil investigation demand from the Federal Trade Commission. The stock was halted around 1:19 pm EDT with an indication for "news pending." FBN's Charlie Gasparino had some insight about ten minutes later.

He tweeted:

About ten minutes after the Gasparino tweet, Herbalife issued an official press release confirming the FTC's civil investigation. The company said it “welcomes the inquiry” and will “cooperate fully with the FTC.” Herbalife is “confident [it] is in compliance with all applicable laws and regulations,” according to the release. Gasparino was watching the story closely and followed up with this tweet:

Herbalife shares resumed trade around 1:50PM EDT and immediately plunged more than 20 percent. The stock has since bounced modestly and is now over the $60 level. Shares last traded at $60.65, down about seven percent for the session. On the back of the Herbalife halt, shares of Nu Skin (NYSE: NUS) spiked down from $81 to $68, but have since rebounded slightly to $74. Similarly, shares of USANA Health (NASDAQ: USNA) tumbled more than 8 percent amid the FTC fears. Traders often clump shares of Herbalife, Nu Skin and USANA into a similar basket.

Posted-In: Charles Gasparino FBNNews Hedge Funds Hot Movers General Best of Benzinga

 

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