Bloomberg News

Soros Cut Herbalife a Year After Ackman Short Spurred Rival Bets

February 15, 2014

George Soros

Soros’s family office owned 3.2 million shares, or 3.2 percent, of Herbalife Ltd. as of Dec. 31, according to a U.S. Securities and Exchange Commission filing. Photographer: Chris Ratcliffe/Bloomberg

George Soros’s Soros Fund Management LLC trimmed its stake in Herbalife Ltd. (HLF:US) in the fourth quarter after the stock climbed by at least 60 percent from when the billionaire’s family office purchased the shares last year.

Soros’s family office owned 3.2 million shares, or 3.2 percent, of the Cayman Islands-based nutritional weight loss and supplement company as of Dec. 31, according to a U.S. Securities and Exchange Commission filing yesterday. The largest investor in Herbalife, Carl Icahn, maintained his 16.8 percent position, while Perry Capital LLC added to its holdings, regulatory filings show.

Soros’s money managers, who oversee $25 billion for the billionaire, invested in Herbalife after Bill Ackman made a $1 billion wager against the company in the final days of 2012. Ackman, head of Pershing Square Capital Management LP, has said Herbalife operated like a Ponzi scheme, allegations the company has repeatedly denied. Soros, billionaire Icahn and Perry were among hedge-fund managers who took the other side of the trade, betting the shares would jump. They climbed 145 percent in 2013 including reinvested dividends.

Soros Fund Management, run by Chief Investment Officer Scott Bessent, bought 4.9 percent of the company in the second quarter of 2013, when the shares (HLF:US) traded at an average price of $42.58. They traded at an average of $69.30 during the fourth quarter, and closed as high as $80.81 in late December.

Ackman Loss

Ackman said in November that his Pershing Square had lost as much as $500 million on the investment. In an interview on Bloomberg Television that month he said he “will take this to the end of the earth.”

Perry, based in New York, added 367,862 Herbalife shares in the fourth quarter to take its ownership to 3 million, or about 3 percent of the company. Hayman Capital Management LP, run by Kyle Bass, exited its investment selling 436,371 shares during the period.

Herbalife has dropped 16 percent this year. Ackman said earlier this week that his position is bigger now than it was when he first announced the trade, setting him up for a larger profit if the company collapses.

Michael Vachon, a spokesman for Soros, declined to comment on the firm’s holdings.

The regulatory filing shows the firm acquired stakes in JPMorgan Chase & Co. (JPM:US) and Citigroup Inc. (C:US) during the fourth quarter.

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)
    • $65.85 USD
    • -0.26
    • -0.39%
  • JPM
    (JPMorgan Chase & Co)
    • $59.17 USD
    • 0.17
    • 0.29%
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