Herbalife shares continue to struggle for the second day in a row, putting much of Wall Street into a quandary. Now we’ve learned that Paul Sohn, who’s credited with engineering George Soros’ investment into Herbalife, has left the firm.
Sohn said to have left quietly
CNBC cites people familiar with the situation who said Sohn left Soros Fund Management quietly late last year. A Soros spokesperson confirmed Sohn’s departure but said that it was “unrelated to any position the firm may have or has had in Herbalife.”
The portfolio manager was known to have been the one to get Soros’ firm into its long position in Herbalife. The firm started investing in Herbalife in 2013, and at the time, it appeared as if Soros was only investing in the controversial company for the fun of it. Things turned serious just a month later, however, after the Securities and Exchange Commission began investigating Soros’ trades of Herbalife stock.
Soros Fund Management cuts Herbalife position
Soros’ firm has been trimming its position in Herbalife for months, as the company’s stock price lost half of its value in 2014. At the end of June 2014, Soros’ firm held 2.85 million shares of Herbalife, according to regulatory filings. By the end of September, the firm held just 1.89 million shares. The nutritional supplements company was Soros’ 56th biggest position.
Shares of the multi-level marketing company have continued their downward trend this year as well, with trade volumes going through the roof this week.
Sohn versus Ackman on Herbalife and elsewhere
Herbalife has been under fire for more than two years, as activist investor Bill Ackman accuses it of being a “pyramid scheme.” It’s common knowledge on Wall Street that George Soros is no fan of Ackman, although it’s unlikely he waded into the Herbalife fray only because he doesn’t like Ackman.
Sohn, however, apparently did have some kind of personal beef with Ackman. In 2013, the New York Post quoted Sohn as saying, “George Soros broke the Bank of England. George Soros can break the back of Ackman.” He reportedly spoke those words at an investment ideas dinner.
According to CNBC, Sohn isn’t the only recent departure at Soros Fund Management. Analyst Nils Tristan and portfolio manager Randy Yuen also reportedly left the firm recently. The network does not give any indication of why they may have left.
Paul Sohn did not respond to an email from valueWalk.