George Soros’ firm Soros Fund Management LLC boosted its stake in Herbalife, while some of the firm’s top 20 investors liquidated their positions during the fourth quarter.
Herbalife’s shares have fallen significantly since December 2012, when hedge fund manager Bill Ackman announced that he was establishing a more than $1 billion short position.
George Soros ups stake by nearly 80% in Herbalife
As reported by ValueWalk, George Soros boosted his firm’s stake in Herbalife during the fourth quarter of 2014. According to a regulatory filing Tuesday, Soros Fund Management LLC added 1.56 million Herbalife shares during the fourth quarter. George Soros’ New York-based fund now owns 3.8% of the company. The stake was valued at about $130 million as of December 31, the regulatory filing reveals.
Relying On Old-Fashioned Stock Picking, Lee Ainslie Reports His “Strongest Quarter” Ever
Lee Ainslie's Maverick Fund USA enjoyed its "strongest quarter in the fund's history" during the three months to the end of June. According to a copy of the firm's second-quarter letter to investors, which ValueWalk has been able to review, Maverick Fund USA gained 18% in the second quarter. Following this performance, the fund was Read More
Reacting to the latest disclosure, Herbalife’s shares jumped 5.5% to $34.59 at the close in New York, though the stock has dropped 25% since the end of the third quarter.
In the third quarter, George Soros’ firm trimmed its holdings by 2.85 million shares, or about 60%. The value of the stake had declined by 73% to $82.6 million in that period. The 13F filing revealed that Herbalife was the fund’s 31st-biggest holding.
A few top-20 investors exited from Herbalife
Interestingly, three of the top 20 investors in Herbalife liquidated their positions during the fourth quarter. According to a SEC filing, Herbalife Ltd’s fifth-largest investor Richard Perry dumped his firm’s entire 5.6 million-share stake sometime between October and the end of December.
Moreover, hedge fund Okumus Fund Management liquidated all of its 1.9 million shares, while Tiger Consumer Management got rid of all of its 1.8 million shares. Kerrisdale Capital, run by Sahm Adrangi, also trimmed its holdings, selling 63,588 shares, while Huber Capital trimmed its stake 13% to 1.6 million shares.
Last November, Herbalife said that it missed quarterly earnings targets for the second time in a row when its third-quarter profit tumbled 92%. The company also warned that net sales would drop in the fourth quarter.
However, Bill Stiritz, the nutrition and weight loss company’s fourth-largest shareholder, with an 8.2% stake, has added to his stake. As reported by ValueWalk, Post Holdings executive chairman Bill Stiritz used the recent drop in Herbalife’s stock price as a reason to add to his position.
As the latest SEC filing reveals, as Herbalife’s share price dropped, Soros Fund Management snapped up more shares.
The Herbalife saga is a showdown of billionaire investors, with George Soros and Carl Icahn lining up against Ackman. Carl Icahn, who controls almost 19% of Herbalife, is the company’s largest shareholder with five board seats.
In December 2012, Pershing Square’s Chief Bill Ackman said that Herbalife Ltd had no value, that it was a pyramid scheme and thus the stock price will end up at zero.