Shares of Herbalife have tanked this morning.
Reuters is reporting that Massachusetts Senator Edward Markey has sent letters to the SEC and FTC asking that they look into Herbalife’s business practices.
The stock was last trading down nearly 13 per cent.
Herbalife is a multi-level marketing company that sells nutritional products such as weightloss shakes and supplements .
The California-based company’s stock has been at the center of a massive hedge fund war for over a year now.
Hedge fund manager Bill Ackman, who runs Pershing Square Capital Management, is short Herbalife.
In December 2012, he publicly announced he’s shorting more than 20 million shares of the company with a price target of $US0. Ackman believes that Herbalife operates as a “pyramid scheme” and that regulators will be persuaded to investigate the company and shut it down.
Not everyone as agreed with Ackman’s thesis, though. A number of hedge fund managers, including Ackman’s rival Carl Icahn, have gone long the stock.
Since Ackman publicly confirmed that he’s betting against the stock, Herbalife’s shares have risen nearly 73%. Today, however, is the stock’s biggest sell-off in a while.
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