Herbalife Ltd. shares tumbled 7.4 percent after one of its peers cut their sales forecast and billionaire investor Bill Ackman renewed his attacks on the nutrition company.
Ackman, who has waged an almost three-year battle against Herbalife, said on Tuesday that he has “lots of new stuff, none I can report.” The investor, who runs Pershing Square Capital Management, spoke at the Bloomberg Markets Most Influential Summit in New York. “Stay tuned,” Ackman said.
Nu Skin Enterprises Inc., which relies on a direct-sales approach, also raised concerns about the industry on Tuesday when it lowered its sales forecast. Nu Skin cited currency headwinds and slower-than-expected sales of cosmetic oils in China.
Herbalife dropped to $53.99 at the close on Wednesday in New York, the biggest one-day decline since April. Shares of the Los Angeles-based company had been up 55 percent this year through Tuesday’s close. Nu Skin, meanwhile, fell 26 percent.
Herbalife has been sparring with Ackman since December 2012, when the billionaire accused the nutrition company of running an illegal pyramid scheme. At the time, Ackman said Pershing Square was betting $1 billion against the stock. Herbalife has repeatedly denied his accusations, but the criticism has led to probes by U.S. regulators and law enforcement.
Ackman has assembled a dossier of negative information about Herbalife, but his attacks haven’t always yielded results. He delivered an anti-Herbalife presentation in July 2014 that actually caused the company’s stock to rise 25 percent. Ackman later described it as a “PR failure” and said he had raised people’s expectations too high ahead of time.
In response to Ackman’s latest remarks, Herbalife said the billionaire is engaged in a campaign to manipulate the stock.
“After dozens of negative stories calling into question Ackman’s activities, including two recently in Fortune and Forbes, Ackman is simply running out of tricks,” Alan Hoffman, a spokesman for the company, said in an e-mailed statement.