Herbalife has been in the news a lot lately because its stock is in the the middle of a heated hedge fund battle between Bill Ackman and Carl Icahn.
Late last year, Ackman, who runs $US12 billion Pershing Square Capital Management, publicly declared that he’s shorting $US1 billion worth of Herbalife stock.
Ackman believes that the company is a “pyramid scheme” that targets lower income individuals. As a result, he thinks regulators, specifically the Federal Trade Commission, will be persuaded to investigate it and shut it down.
His rival, Carl Icahn, purchased a massive stake in the company and said that he thinks Ackman will be the victim of the “mother of all short squeezes.”
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Produced by William Wei
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