December 18, 2013 |
A year ago, activist investor Bill Ackman rocked Wall Street with a $1-billion bet that shares of Herbalife Ltd., the Los Angeles seller of weight-loss and nutrition products, would slide to zero. Herbalife was a "pyramid scheme," bound to be undone by regulators and destroyed, he told the Los Angeles Times and other media outlets Dec. 19. Herbalife shares plummeted 42% in the next five days, hitting a midday low of $24.24 on Christmas Eve. At the time, it seemed that 2013 would be difficult for Herbalife.
December 3, 2013 |
Herbalife Ltd. said a Belgian appeals court has overturned a lower court finding that the company operated an unlawful pyramid scheme. Critics of the Los Angeles nutritional products company had said the 2011 ruling in Belgium was evidence that the company improperly rewards its independent sales people for recruiting others into the business. Herbalife said in a statement that a Belgian appeals court ruled that the company's sales model "is in full compliance with the law. " PHOTOS: Top 10 Southern California companies "Herbalife always believed that the first judgment contained factual errors and was based on misinterpretations of its direct-selling sales method, and was confident that the original judgment would be overturned on appeal," Herbalife said in a statement Tuesday.
May 7, 2013 |
Herbalife Ltd. shares gained 4% and traded part of Monday above the price they were when hedge fund manager Bill Ackman first accused the Los Angeles nutritional products company of operating a long-running pyramid scheme. The company's stock price plummeted Dec. 19 after Ackman publicly disclosed that he had taken a $1-billion short position against its shares. In the four trading days after Ackman's announcement, the stock fell 43%, reaching an intra-day low of $24.24 on Christmas Eve. Taking a short position involves borrowing shares at a high price and selling them, expecting to repurchase them later when the price falls and thus profit from the decline in stock prices.
April 10, 2013 |
This was the last thing Herbalife Ltd. needed. Just as the Los Angeles company appeared to be regaining its footing from a Wall Street hedge fund manager's assault, the company's auditor resigned abruptly because of an alleged insider-trading scandal. Accounting giant KPMG said Tuesday that Scott London, its chief Southern California auditor, had divulged financial information about Herbalife to a friend who then used those secrets to gain an edge in the markets. KPMG fired London, who had supervised Herbalife's audits, and withdrew its approval of the company's financial statements.
February 20, 2013 |
Herbalife Ltd. had some good news - and a little bad - as the nutritional products giant released its fourth-quarter results. The good: Sales of its weight-loss and nutritional products increased 20% to $1.1 billion in the quarter, and profit surpassed Wall Street's projections. And the company expects 2013 to be even better. The bad: Herbalife could spend $10 million to $20 million this year in "legal and advisory services" to fend off allegations made by a Wall Street hedge fund manager that it is operating a pyramid scheme.
February 15, 2013 |
NEW YORK - It's no longer just a war of words. Corporate raider Carl Icahn has thrown $214 million behind Herbalife Ltd., the Los Angeles-based maker of health foods and nutritional supplements accused of being a pyramid scheme by Icahn's foe, fellow Wall Street tycoon Bill Ackman. Documents filed with the Securities and Exchange Commission on Thursday reveal that Icahn purchased more than 14 million shares and options in Herbalife, a nearly 13% stake that would make him the company's second-largest investor.