Editor’s note: This article was first published in September 2014 and reports news from Monday 22 September 2014, during the Ackman–Icahn battle over Herbalife. In 2016 Herbalife settled with the US Federal Trade Commission for $200 million, and Ackman closed his short position in 2018.
Herbalife traded this Monday with losses of as much as 14%, although late in the session it managed to close down 10%, which is no small fall. This new slump in the share price means Herbalife has now lost 50% in 2014, trading at around $40, down from the $80 it was trading at in January this year.
Although there is no explanation for these dizzying falls, some rumours suggest they are because the famous investor Carl Icahn may be thinking of selling down his position in the company. Remember that Icahn was the antidote to Bill Ackman that kept the shares from collapsing.
If it is ever confirmed that Icahn is selling his stake, it would not only trigger another big fall, it would also prove Bill Ackman right, conceding his argument that Herbalife operates as a pyramid scheme and that its shares will end up worth $0.
We have been following Herbalife very closely, because the outcome will leave us with some incredible investment lessons, and an example of patience and perseverance: two investment titans (Icahn and Ackman) have clashed over the future of a company with two completely contradictory arguments, and only one of them is right. There is a lot of money at stake in this company, and the share price is looking very ugly.
How will this end for the company? We can’t wait to find out.
See also: Jim Rogers: 10 stock market investing lessons
Featured image: AviateHistory, CC0 1.0, via Wikimedia Commons.
