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.


In Depth

Q&A: Reg A+ Will Transform the Alternative Asset Landscape

Jul 7 2015 | 4:03pm ET

In addition to easing capital formation for small companies, Regulation A+ has enormous...

Lifestyle

Fiat Chrysler Files Paperwork For Ferrari IPO

Jul 23 2015 | 5:05pm ET

Italian sportscar maker Ferrari has taken a step closer to a stock market listing...

Guest Contributor

Lifting of Foreign Ownership Limits Signals Sea Change in Vietnam's Capital Markets

Jul 28 2015 | 3:01pm ET

The lifting of restrictions on foreign ownership limits in Vietnam later this year...

 

Editor's Note