Bill Ackman surrenders in long fight with Herbalife
Bill Ackman could probably use need a nice soothing herbal tea after finally cutting his losses on Herbalife (HLF).
The billionaire investor told CNBC on Wednesday that his hedge fund, Pershing Square Capital Management, has sold its holdings in the nutritional supplements. Ackman in 2012 took a $1 billion short position against Herbalife, mounting a public campaign to persuade investors that the company is little more than a pyramid scheme that should be shuttered by regulators
Herbalife in 2016 agreed to pay $200 million to consumers and to restructure its business in the U.S. to resolve Federal Trade Commission claims it had misled hundreds of thousands of people who signed up to sell the company's products. The settlement prompted investor Carl Icahn, Herbalife's largest stakeholder, to issue a statement saying he'd been vindicated.
Separately, Illinois Attorney General Lisa Madigan announced a $3 million settlement with Herbalife to resolve complaints about false and misleading claims that lured people into a multi-level marketing scheme.
After Ackman forecast Herbalife shares would ultimately become worthless, Herbalife's stock tended higher, propelling Ackman to close the position last year, an unwinding he confirmed to CNBC.
On Wednesday, in fact, shares of Herbalife rallied to a record, rising more than 6 percent to $92.14, after the company said it would change its corporate name to Herbalife Nutrition, refinance debt and do a 2-for-1 stock spilt.
Ackman also said Pershing has amassed a stake in United Technologies (UTX). That comes a week after the aircraft parts maker's CEO said the company was considering strategic options, including spinoffs of its jet engine and air conditioner businesses.
The investor has reportedly reduced Pershing's staff and attempted to keep a low profile after three years of losses, which also came as a result of a bullish wager on Valeant Pharmaceuticals (VRX) that failed to pan out.
