Herbalife shares slump as its biggest shareholder Carl Icahn looks to sell shares

Icahn Enterprises is now tendering as many as 11.4mln of its shares in the company

Herbalife's shares are trading sharply lower in the morning session

Shares in Herbalife Nutrition (NYSE:HLF) slipped sharply Friday after its biggest shareholder Icahn Enterprises LP (NASDAQ:IEP) revealed that it is looking to sell close to a quarter of its shares in the nutritional supplements group.

Disappointed by the news, investors sent Herbalife shares down by 8% to US$49.28 in Friday’s early trade session.

Having first acquired its shares at the end of 2012, Icahn Enterprises, the activist investor Carl Icahn’s investment firm, is now tendering as many as 11.4mln of its Herbalife shares in the company’s self-tender offer to pare back its exposure.

Even if Icahn succeeds in selling off a big chunk of his position, Icahn Enterprises will remain Herbalife’s biggest shareholder, with at least 34.4mln shares.

“Given that our Herbalife investment has become an outsized position, representing approximately 24% exposure to total net asset value, it is only prudent for IEP to reduce its exposure,” the investment firm said in a statement.

When Carl Icahn first invested in Herbalife back in 2012, the company was under attack from short sellers and its stock was out of favor. After joining the company’s board and amassing its large position in the stock, Icahn’s directors worked to stabilize the company in the face of short-sellers.

Icahn’s confidence in the company came in sharp contrast to billionaire William Ackman’s negative view on the stock. While at the helm of a very public short-selling campaign against Herbalife, Ackman called the company a “pyramid scheme” and went so far as to say that its stock would eventually go to zero. 

Quick facts: Herbalife

Price: 51.94 USD

Market: NYSE
Market Cap: $7.16 billion

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