Herbalife's Biggest Individual Shareholder Is Getting Smoked

Herbalife’s largest individual shareholder is in the red.

On Monday, shares of Herbalife tanked into Monday’s close. The stock fell 10.31% to end the day at $US40.21 per share on a false rumour that Carl Icahn was unwinding his position. The stock was last up about 3% in the pre-market on Tuesday.

Herbalife is a multi-level marketing firm that sells nutrition products such as weight loss shakes and vitamins. The company has been at the center of a huge hedge fund war for nearly 20 months.

For a while, a lot of attention has been focused on the losses that hedge fund manager Bill Ackman has amassed on his infamous short. Things have been looking better for him in the last couple of weeks, though.

Meanwhile, Herbalife’s largest individual shareholder William “Bill” Stiritz has racked up millions in paper losses.

On September 3, 2013, the 78-year-old investor disclosed his massive Herbalife position. At the time, Stiritz owned 5,382,362 shares, or a 5.22% stake. We estimated then that Stiritz’s Herbalife stake was worth about $US322 million or so. The stock closed at $US59.90 the day he disclosed that position.

Then, on November 18, 2013 (when Herbalife was at $US67.20) and again on January 29, 2014 (when Herbalife was at $US62.82), Stiritz added to his position. He last held 7,484,804 shares, or an 8.15% stake, data compiled by Bloomberg shows.

Shares of Herbalife are down more than 25% since Stiritz first disclosed his position. So far this year, they’re down more than 49%.

Based on our rough estimates using the closing price of the days when he disclosed his stakes, Stiritz has suffered an estimated $US145 million in paper losses on his Herbalife investment.

What’s more is his stake is massive for an individual. To put things into perspective, the second biggest individual shareholder is Herbalife’s CEO, Michael Johnson. Johnson owns just over a million shares.

It’s unclear what Stiritz’s personal net worth is. We couldn’t find him mentioned on any Forbes’ billionaires’ lists.

Stiritz is currently the CEO and chairman of food company Post Holdings. He’s also Post’s largest individual shareholder with approximately 369,662 shares, or a 0.82% stake, Bloomberg data shows. His Post stake was worth just over $US28.9 million as of yesterday’s close.

HerbalifeGoogle FinanceHerbalife has had an ugly year.

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