Bloomberg News

Soros Purchases 4.9% Herbalife Stake Betting Against Ackman (1)

August 14, 2013

George Soros’s Soros Fund Management LLC bought a 4.9 percent stake in Herbalife in the second quarter in a bet that fellow billionaire Bill Ackman is wrong about the nutritional and weight-loss supplement company.

The $25 billion family office bought 5 million shares of the Cayman Islands-based company, according to a filing today with the U.S. Securities and Exchange Commission. The stake was valued at $227.5 million at the end of June.

Soros, whose firm is based in New York, joins investors including Brookside Capital Management LLC that took new positions in Herbalife in the quarter. Billionaire Carl Icahn and Capital Group Cos., which runs the American Funds, added to existing holdings. The shares have jumped 77 percent since March 31, and they’ve more than doubled this year.

Ackman said in late December that his Pershing Square Capital Management LP had sold short (HLF:US) about 20 million shares of Herbalife to bet against the company, which he said operated like a pyramid scheme. Herbalife has repeatedly denied those allegations. Icahn, who bought Herbalife shares after Ackman laid out his bearish case, now is the company’s largest individual investor (HLF:US), with a 16.5 percent stake, according to data compiled by Bloomberg.

Soros, an 83-year-old hedge-fund industry pioneer and philanthropist, also took a 9.1 percent stake in J.C. Penney Co. in the quarter, with a market value of $341.4 million at the end of June, today’s filing shows. The family office disclosed a 7.9 percent passive stake in the Plano, Texas-based retailer in April.

Gold ETFs

The firm sold off its position in the SPDR Gold Trust, an exchange-traded fund, valued at $82 million at the end of March, and its holding in Market Vectors Gold Miners ETF, worth $100.9 million.

Soros Fund Management also sold its 7.84 million shares of US Airways Group Inc. (LCC:US), valued at $133.1 million at the end of the first quarter. The shares fell (LCC:US) 14 percent since Aug. 12, as the U.S. Justice Department sued to bar the merger of the airline with AMR Corp., the operator of American Airlines.

The firm added to its holding in Google Inc., its largest equity position as of June 30.

To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net

To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net


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Companies Mentioned

  • HLF
    (Herbalife Ltd)
    • $42.99 USD
    • -0.81
    • -1.88%
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