Shares of nutritional supplement maker Herbalife jumped Wednesday on a media report that billionaire investor George Soros has taken a large position in the company’s stock.
THE SPARK: CNBC reported that the hedge fund activist has taken a “long” position in the company, citing sources familiar with the matter that the business news channel did not identify.
A spokesman for Soros Fund Management said in a statement that the firm does not comment on its positions.
THE BACKGROUND: Soros would be the latest billionaire investor to make a large bet on the success or failure of Herbalife.
Rival investors Bill Ackman and Carl Icahn have been feuding over the company and its prospects since late last year.
Ackman publicly attacked Herbalife, saying its business model amounts to a pyramid scheme that generates money by recruiting new salespeople rather than selling products. Ackman has taken a “short” position in the company, essentially betting that the company’s stock price will fall. Icahn disagreed and increased his long stake in the company.
If correct, Wednesday’s report indicates Soros, like Icahn, expects Herbalife shares to rise.
Earlier this week, Herbalife Ltd. reported an 8 percent gain in second-quarter profit on stronger sales of its nutritional formulas. Its adjusted results far exceeded market expectations, and the company raised its full-year outlook.
SHARE ACTION: Herbalife Ltd. shares rose $5.64, or 9.4 percent, to $65.68 in afternoon trading, after rising as high as $66.26 earlier in the day, its highest since March 2012.