Shares in Herbalife (HLF) are up as much as 17% to $63.49 in midday trading Tuesday as investors seem to have rejected Bill Ackman’s latest presentation on the nutritional supplement company.
Appearing on CNBC Monday afternoon, Ackman — who revealed his $1 billion short against the company in December 2012, and has been quoted as saying he’ll take his HLF bet “to the end of the earth” even as he has lost $400-$500 million on the investment — reiterated his assertion that the Grand Cayman-based multilevel marketing firm is nothing but a pyramid scheme and that it was only a matter of time before it collapses.
“This will be the most important presentation that I have made in my career. So how’s that for raising expectations? But we won’t disappoint,” Ackman said on CNBC’s “Halftime Report.”
Following his comments, shares of Herbalife nosedived more than 11 percent, or $6.82, to close at $54.02.
Ackman, who heads hedge fund firm Pershing Square Capital Management, stands to gain $2 billion if the company fails. That said, shares in the $6.15 billion market cap company have gained more than 295% in the last five years, and nearly 35% since Ackman’s Dec. 2012 short position.
Last week, Herbalife issued a statement saying Pershing Square’s thesis “is simply false” and that its “information, presentations and representations cannot be trusted.”