The Wall Street Journal is reporting that the SEC has opened an inquiry in Herbalife.
Following the news, Herbalife sold down sharply, more than $3 to hit a low of $36.28 after trading at $40.58. Since then, it has bounced to above $40 a share.
Hedge fund titan Bill Ackman, the founder of Pershing Square Capital Management, revealed last month that he has a massive short position in Herbalife — a multi-level marketing company he says is a pyramid scheme.
Today, Dan Loeb, the founder of Third Point, disclosed a massive long position in Herbalife. Third Point has 8,900,000 shares, or an 8.24% stake in the company.
Check out the chart: