It looks like last week’s Ackman correction in Herbalife may be coming to an end.
Herbalife shares are currently on a tear after falling about 12% last week on news that a senator from Massachusetts had sent letters to the FTC and SEC asking that they investigate the nutrition company.
Today, Herbalife’s stock was last trading up more than 9%.
According to Fox Business Network’s Charlie Gasparino, D.A. Davidson analyst Tim Ramey is leaving his firm. According to Gasparino, he’s possibly headed to join forces with Bill Stiritz.
Ramey is known for being super bullish on Herbalife.
When reached by telephone, Ramey said, “No comment.”
Stiritz, 77, is the CEO/chairman of food company Post Holdings. He’s also the largest individual shareholder of Herbalife. It’s been reported that he wants to help Herbalife undergo a leveraged buyout (LBO).
Herbalife is a multi-level marketing company that sells nutritional products like weightloss shakes and supplements.
It’s the company that hedge fund manager Bill Ackman is massively short. Ackman, who runs Pershing Square, believes the company operates as an illegal “pyramid scheme”.
He publicly declared in December 2012 that he’s short about 20 million shares of Herbalife with a price target of $US0. In other words, he thinks the company will be shut down by regulators.
A bunch of other fund managers, including Ackman’s rival Carl Icahn, have disagreed with Ackman and have gone long the stock.
Here’s the chart: