Herbalife (HLF) Plunges After Bill Ackman Gets Short; Calls a 'Pyramid Scheme'

December 19, 2012 2:22 PM EST
Shares of Herbalife Ltd. (NYSE: HLF) plunged mid-day Wednesday after CNBC revealed that it is Bill Ackman's latest short pick for his Pershing Square Capital hedge fund.

Earlier, StreetInsider.com noted that Ackman would present a new short idea at tomorrow's Ira Sohn conference. Now it is known which one.

Ackman has been doing fundamental research on Herbalife for a year and considers the company to be a "pyramid scheme," CNBC noted. He said it is 'one of the single best short thesis he's ever seen,' according to the reporting.

The hedge fund manager is expected to reveal more at tomorrow's conference.

Shares of HLF are down 10.7 percent following the news. Peer Nu Skin Enterprises (NYSE: NUS) fell 5.5% in sympathy.

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PB on 2012-12-19 14:53:35
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But if it was a long position, that's okay?

william robinson on 2012-12-19 14:48:02
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seems these investors take position and then inform the market of their short position and the trade becomes self-fulfilling prophecy.

something not right w/ this.

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