| NEW YORK
NEW YORK Feb 14 Fund managers, most prominently
Carl Icahn, are showing a strong taste for weight management and
nutrition company Herbalife Ltd, with some taking stakes
in the fourth quarter and Icahn making a play more recently.
Icahn, the billionaire investor, said on Thursday in a
regulatory filing that he now owns 14 million shares of the
company, or nearly 13 percent of it. The news sent Herbalife
shares up 17 percent in after-hours trading.
The filing, which said Icahn wants to explore strategic
options with management, finally puts a number on what Icahn
It also sharpens the battle lines between hedge fund
industry heavyweights William Ackman and Daniel Loeb. Ackman
argues that the company is a house of cards and its stock should
drop to zero, while Loeb sees room for Herbalife shares to climb
to $68. The shares closed on Thursday at $38.27.
Icahn has now replaced Loeb, who told investors in January
that he had bought an 8 percent stake in Herbalife, as the most
prominent rival to the short position Ackman has taken.
Loeb and Icahn are keeping company with two managers who
were mentored by industry legend Julian Robertson, plus a fund
started by mutual fund powerhouse Fidelity Investments, new
regulatory filings show.
Those managers might have gotten in at a low price and made
money as the stock moved higher again in January.
Phillipe Laffont, who founded Coatue Management after
working for Robertson's Tiger Management, owned 850,000 shares
at the end of December, according to a filing made with the
Securities and Exchange Commission on Thursday.
Similarly Patrick McCormack, another so-called Tiger Cub,
reported that his Tiger Consumer Management nearly doubled its
exposure to 2.3 million shares at the end of December. In the
third quarter, it owned 1.4 million shares, which ranked it
among Herbalife's 20 largest investors.
Geode Capital, which was started by Fidelity, upped its
holding in Herbalife slightly.
Loeb's regulatory filing for the fourth quarter showed that
he owned roughly 3 million shares of Herbalife at the end of
December, signaling that he kept buying the stock in early
January before announcing that he owned 8.9 million shares.
By Jan. 3, Loeb was Herbalife's second-biggest investor
after Fidelity Management & Research Co.
Some of the newcomers may have been tempted to enter the
fray precisely because Ackman helped drive the price down
dramatically in December, when he said he was shorting the
company. Icahn did not list the company as one of his holdings
at the end of December.
Shares of Herbalife, which plunged 40 percent after Ackman's
presentation, surged 76 percent during the height of a short
squeeze, which took place approximately from Dec. 24 to Jan. 15,
when some of these hedge fund managers may have come in.