Pershing Square Closing In On Break-Even Herbalife Bet

Mar 24 2014 | 1:27pm ET

Pershing Square Capital Management’s Herbalife short has been a roller-coaster, but after months underwater—sometimes to the tune of half a billion dollars—the hedge fund is nearly break-even on its investment.

Herbalife shares hit an eight-month low on Friday, nine days after it announced a Federal Trade Commission probe. Pershing Square’s William Ackman has argued that the company is a pyramid scheme that will be shut down by the FTC.

On Friday, Herbalife shares fell to $49.54. Ackman built his short during a period when the company’s shares traded at an average price of $48.58.

But Herbalife shares soared last year, costing Ackman hundreds of millions of dollars on paper, after Ackman rival Carl Icahn announced a huge investment in the company. Indeed, Ackman is now a good deal farther away from break-even than he was on Friday, as Herbalife shares have rallied following Icahn’s announcement that Herbalife would add three more of his representatives to its board.

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Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…