Herbalife shares slump on Nu Skin, Ackman's 'new' information
BOSTON/NEW YORK - Shares in nutrition company Herbalife Ltd <HLF.N>, which billionaire investor William Ackman has accused of being a fraud, fell 7.5 percent on Wednesday, feeling the pressure from rival cosmetics maker Nu Skin's cut to sal...
BOSTON/NEW YORK - Shares in nutrition company Herbalife Ltd <HLF.N>, which billionaire investor William Ackman has accused of being a fraud, fell 7.5 percent on Wednesday, feeling the pressure from rival cosmetics maker Nu Skin's cut to sales forecasts.
Nu Skin Enterprises Inc <NUS.N> shares tumbled 25.7 percent after the company said it expects third quarter revenue of $570 million to $573 million, down from an earlier projection of $620 million. Two investors in Herbalife said that Nu Skin's troubles were directly related to Herbalife's stock price decline on Wednesday.
On Tuesday, Ackman, who has bet $1 billion that Herbalife's shares will fall after accusing the company of running a pyramid scheme, said that he had more information on Herbalife when asked about it by a reporter at a conference sponsored by Bloomberg. Herbalife denies running a pyramid scheme where members make more money by bringing in new members than selling the actual product.
"Lots of new stuff, none I can report," Ackman said in response to a question whether there was something new to say about the company. He was speaking after Tuesday's market close.
A spokesman for Herbalife had no comment. A spokesman for Ackman's Pershing Square Holdings had no comment.
During his nearly three-year campaign against Herbalife, Ackman has made several long presentations that detailed the company's shortcomings. Several times the Herbalife share price went up when Ackman spoke.
Pershing Square Holdings has faced a few difficult weeks as Valeant, one big holding, saw its share price tumble amid questions of price hikes. Also Platform Specialty Products, another big holding, cut its outlook, sending its stock price down 10 percent on Wednesday.