Herbalife shares have climbed by more than 40% so far year to date, and at least one major investor decided to take profits on that increase. George Soros’ hedge fund has sold off its entire stake in the battleground stock.
Soros versus Ackman on Herbalife
Soros Fund Management revealed in a regulatory filing with the Securities and Exchange Commission that it has exited its Herbalife position. The firm sold its almost 2 million shares during the third quarter, turning a nice profit. Soros himself doesn’t make decisions regarding the holdings of his firm, which serves as a family office for his fortune and that of his family members. Nonetheless, Soros’ long position placed him staunchly against short-seller Bill Ackman and his firm Pershing Square Capital Management. Whitney Tilson has sided with Ackman on the short side.
Soros isn’t the only Herbalife to exit the position this year. Regulatory filings indicate that Balyasny Asset Management, Partner Fund Management, and Angelo Gordon & Co. have sold off their stakes during the third quarter as well. Other investors to exit their Herbalife positions include Van Otterloo & Co., Mayo, AHL Partners, and Grantham. The data was collected from the firms’ 13F filings with the SEC, which they are required to file 45 days after the end of each quarter.
Some firms upped their positions in Herbalife during the third quarter, including Route One Investment Co., Seregeti Asset Management, and AJO. Activist investor Carl Icahn maintained his 17 million share stake in the company.
Herbalife battle rages on
Looking at the full year to date, Ackman has lost out by more than 20% on his short bet, although he has turned a profit on the position last year with a 40% gain, reports Reuters. He originally placed a $1 billion short bet that Herbalife shares would fall to $0 almost three years ago.
The feud between him and Herbalife rages on as Ackman maintains that the multi-level marketing company is a pyramid scheme more focused on member recruitment than product sales. Herbalife has not officially been accused of any wrongdoing by regulators and denies Ackman’s allegations.
Regulators from various agencies have launched investigations on both sides of the debate, looking into both Herbalife itself and outside trades of its stock. Ackman confirmed earlier this year that officials had interviewed some consultants who had done research for him. Neither Ackman nor his firm Pershing Square has been accused of wrongdoing by law enforcement or regulators.
As of this writing at precisely 10:43 a.m. Eastern, shares of Herbalife were up 1.12% at $55.87 per share.