Shares of Herbalife are soaring to their highest level in a year after the company hinted at a possible resolvement to its case with the Federal Trade Commission.
Herbalife CEO Michael Johnson said that the investigation by the FTC is close to ending and estimated possible financial hits to the company.
“We have updated our disclosures to report that while there are number of open issues, those discussions have progressed to an advanced stage, and the range of outcomes now include litigation or settlement,” said Johnson in the company’s quarterly earnings call.
“We also announced that if a settlement is reached with the FTC, it would likely include injunctive and other relates — as well as a monetary payment with our best estimate of that payment being $200 million.”
The nutritional supplement company has been under investigation for some time now after concerns were raised that it was operating a pyramid scheme. The most famous detractor of the company is hedge fund billionaire Bill Ackman, whose Pershing Square fund has a short position on Herbalife. Ackman accused the company of using a pyramid structure to prey on low-income individuals, and was featured in a documentary on the company.
As of 12:03 p.m. ET Friday, shares of the company had jumped more than 12% at $65.39 a share, it’s highest level since mid-2014.
Business Insider Emails & Alerts
Site highlights each day to your inbox.