Third Point's Loeb Isn't Always Positive on MLM Cos.; Takes Short in Herbalife (HLF) Peer
Recent Loeb made waves by disclosing an 8.24 percent stake in Nu Skin-peer Herbalife (NYSE: HLF), with the disclosure coming weeks after Pershing Square's Bill Ackman made a big stink about how Herbalife was a sham company based on multi-level marketing practices. Overall, Ackman argued that Herbalife's business model was very unsustainable.
The NY Post is out with Loeb saying the following on his Herbalife position: "We believe Herbalife operates squarely within the FTC's boundaries."
The Post points to sources who've said that Loeb took a "sizable" short position in Nu Skin after commencing research on the company in the summer of 2011. Though Loeb has likely adjusting that position since the initial move, he's said to have been short the stock as of last week.
Nu Skin is akin to Herbalife in that it sells anti-aging products via distributors and word-of-mouth marketing.
Last summer, Citron Research caused a substantial decline in Nu Skin after issuing comments about the company's operations and potential in China, which Herbalife bills as one of its "key growth segments."
Loeb's short bet on Nu Skin could in part act as hedge on his long Herbalife (NYSE: HLF) position, or visa-versa.
Shares of Nu Skin are indicated lower Tuesday.