Market Overview

Herbalife Soars; FTC Says Company 'Not Determined Not To Be' A Pyramid Scheme

Share:
Herbalife Soars; FTC Says Company 'Not Determined Not To Be' A Pyramid Scheme
Related HLF
J C Penney Jumps To The Top Of The Short Seller List
Investing 201: What Is A Dutch Auction?

Shares of Herbalife Ltd. (NYSE: HLF) soared by more than 12 percent early Friday morning to $66.50 following media reports the company was cleared by the U.S. Federal Trade Commission.

If Herbalife's stock holds on to its early morning gains, it will eclipse its prior 52-week high of $66.29.

Herbalife has been in talks with the governmental agency who opened a probe on the company's business following allegations it was operating a pyramid scheme.

Bloomberg noted in early May that talks between Herbalife and the FTC will likely end in a financial settlement. A company spokesperson estimated Herbalife could pay around $200 million in fees.

Related Link: Bill Ackman Says Herbalife Is 'Trying To Get Us To Go Away'

Friday's initial news report appear to confirm the $200 million figure, which Herbalife may pay for misrepresentation claims.

Billionaire investor and hedge fund manager Bill Ackman has been short Herbalife's stock for around three years based on his in depth research which led him to conclude the company is indeed a pyramid scheme.

Ackman told CNBC on Thursday that after several years, his short thesis hasn't changed.

"If it wasn't an attractive investment, we would have covered a long time ago," he said.

Posted-In: Bill Ackman Herbalife Herbalife FTC SettlementNews Hedge Funds Legal Movers General Best of Benzinga

 

Related Articles (HLF)

View Comments and Join the Discussion!
Loading...
Loading...