Shares of nutritional supplements marketer Herbalife Ltd (HLF.N) rose more than 16 percent in regular trading on Wednesday after famous short seller David Einhorn did not present the stock as one of his short ideas at a conference.
However, construction material maker Martin Marietta Materials Inc (MLM.N) and sporting goods retailer Dick's Sporting Goods Inc (DKS.N) fell after the hedge fund manager pitched the stocks as potential short bets.
Some on Wall Street had expected Einhorn to reveal a short position in Herbalife, whose stock had slumped 40 percent before Wednesday after the Greenlight Capital co-founder showed up on the company's conference call on May 1 and asked questions about its business model and distributor groups.
Herbalife later revealed details of its distribution groups in a regulatory filing in response to Einhorn's questioning and announced a stock buyback, but these steps failed to arrest the fall in the stock.
Although Einhorn did not make any specific allegations or critical comments during Herbalife's post-earnings conference call, his mere presence raised the possibility that he is betting against the company.
Caris & Co downgraded the stock last week to "average" from "buy", citing a greater than 50 percent chance that Herbalife will be presented as a short on Wednesday.
Einhorn instead made critical comments about Martin Marietta and Dick's Sporting, saying that Martin Marietta was overvalued and Dick's would be hurt by increasing competition from online retailer Amazon.Com Inc (AMZN.O).
Martin Marietta spokesman Mark Semer said in an emailed statement that the company has come through a challenging period for the construction materials industry by "carefully managing capital and making disciplined operational decisions."
A spokesman for Dick's did not respond immediately to a request for comment.
Einhorn was speaking at the Sohn Investment Conference in New York, which features some of the hedge fund industry's best-known managers, including John Paulson and Bill Ackman.
Once a year, these and other hedge fund managers get together at the charitable event to raise money for pediatric cancer research, by sharing their "best ideas" with hundreds of wealthy investors who pay thousands of dollars to rub shoulders with them.
It is unclear whether Einhorn has any position in Herbalife, Martin Marietta and Dick's Sporting.
Einhorn was not immediately available for comment.
Herbalife shares closed at $49.51 on the New York Stock Exchange. Martin Marietta's stock closed down 8 percent and Dick's Sporting closed down 4 percent.
Shares of Vulcan Materials Co (VMC.N), which Martin Marietta offered to buy for $5.3 billion, also fell 8 percent.
WILLING TO ENGAGE
Ahead of Einhorn's presentation, there had not been any communication between Einhorn and Herbalife since the conference call on May 1, a person close to the company said.
The source said Einhorn first interacted with Herbalife through an employee who attended the company's investor day about six weeks before the earnings call.
After that investor day, one email was sent by Einhorn to the company with some questions on its product buyback. There has been no other interaction after that, the source said.
The company is, however, willing to talk to Einhorn, the source said.
(Reporting by Mihir Dalal and Sagarika Jaisinghani in Bangalore and Martinne Geller in New York; Editing by Maju Samuel)