George Soros’s fund boosted its stake in Herbalife in the fourth quarter, signalling that the embattled maker of diet shakes and supplements still has the billionaire’s backing.
The investor’s firm, Soros Fund Management LLC, added 1.56 million Herbalife shares during the quarter, according to a regulatory filing Tuesday. New York-based Soros Fund now owns 3.8 per cent of the company. The stake was valued at about $130 million as of 31 December, according to the filing.
Herbalife, which sells nutrition products through a network of independent distributors, came under fire in 2012 from investor Bill Ackman, who accused it of being a pyramid scheme. That led to a probe by the US Federal Trade Commission and slowing growth at Herbalife, which has switched to more conservative sales practices. The stock plummeted last year as Herbalife’s woes mounted.
The shares jumped 5.5 per cent to $34.59 at the close in New York after Bloomberg News reported Soros’s increased position before the filing was released. The stock has declined 21 per cent since the end of the third quarter.
In separate filings Tuesday, Okumus Fund Management Ltd. disclosed it had sold all of its almost 2 million shares, while Tiger Consumer Management LLC unloaded its 1.8 million shares.
Soros’s increased stake in the fourth quarter follows a period in which the firm pared its holdings. It cut its stake by 2.85 million shares, or about 60 per cent, in the third quarter. The value of the stake had declined by 73 per cent to $82.6 million in that period. Herbalife was the fund’s 31st-biggest holding, according to a filing at the time.
The Herbalife saga is a showdown of billionaire investors, with Soros and Carl Icahn lining up against Ackman. In recent months, Ackman has held the upper hand: The shares have fallen by more than half from last year’s high.
Bloomberg News, edited by ESM
