Herbalife, Nu Skin Drop After Post Says FTC Readying Probe

Shares of multi-level marketers Herbalife

and Nu Skin

dropped Monday morning after

reported that the Federal Trade Commission is investigating Herbalife. According to documents obtained by The Post, there is a “pending law enforcement action” in regards to Herbalife. Shares of Herbalife fell over 11 percent in the pre-market on Monday, and Nu Skin shares were down over 4 percent. Nu Skin has become a sympathy play to Herbalife, as it operates a similar business. Hedge fund manager Bill Ackman alleged that Herbalife was a pyramid scheme in a presentation he gave back in December. Ackman stated that he expects shares to fall to $0. Other hedge fund managers have taken the opposite side of the trade, most notably Dan Loeb, who took an 8.2% stake in the company. In a letter to his investors, Loeb called Ackman's case against Herbalife “preposterous.” The FTC took action against another multi-level marketing company, Fortune Hi-Tech Marketing, just last week. Shares of Herbalife traded near $31 on Monday.