Shares of Herbalife, which has been one of the most controversial stocks lately, have fallen below the pre-Ackman short levels.
Herbalife’s stock fell $3.57, or 8.19%, to close at $40.02 a share yesterday. The stock was last trading lower in the pre-market today.
Since December 18, the trading session before Bill Ackman confirmed his short, shares of Herbalife have fallen 5.84%.
The stock touched a 52-week low of $24.24 on December 24 and rallied back above the pre-Ackman short levels on January 14.
Yesterday, the Federal Trade Commission went after private Kentucky-based multi-level marketing firm Fortune Hi-Tech Marketing and halted its operations for being an allegedly illegal pyramid scheme pending a trial.
Even though Herbalife and other MLMs were not the target of that presser, the action still seemed to send chills throughout the MLM sector with shares of Herbalife, Nu Skin and Blyth all closing lower yesterday.
During the press conference, the FTC declined to comment on Herbalife.
Ackman, the founder of Pershing Square Capital Management, is shorting more than 20 million shares of Herbalife, a multi-level marketing company that he believes is a pyramid scheme.
After Ackman presented his short case at a special conference last month, hedge fund manager Daniel Loeb, the founder of Third Point LLC, disclosed in January that his fund had snapped up an 8.24% stake in the company on the long side. Loeb said in a letter to investors that Ackman’s short case lacks “merit” and his pyramid scheme allegation is “preposterous.”