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Do the Shorts Have the Upper Hand in Herbalife?

Herbalife (NYSE: HLF  ) continues to be a battleground between investors and short-sellers, made more prominent by big-name hedge-fund managers Carl Icahn and Bill Ackman taking aggressive positions on opposing sides of the stock. Icahn was the front-runner initially, with shares of the stock gaining 145% in 2013, but Ackman may now be gaining traction after repeated calls for investigation into the company's sales practices, to uncover whether it is more of a pyramid scheme than a legitimate business.

And apparently, the Federal Trade Commission was listening. Shares of the company plunged 15% on the news that it will be investigated by the FTC, though shares have now rebounded to a loss of only around 6%. The company itself says that it welcomes the investigation and is confident that it is in compliance.

In this video, Motley Fool health-care analyst David Williamson looks at the ongoing drama in the battle over Herbalife, and tells investors why this is a fight he's staying out of.

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David Williamson

The Motley Fool's Healthcare Analyst, I specialize in Pharma, Biotech, and how the ACA (Obamacare) is changing the business of healthcare in America. Follow me on Twitter for breaking stock news, policy thoughts, and misc musings...

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Related Tickers

9/1/2015 12:00 PM
HLF $55.76 Down -1.81 -3.14%
Herbalife CAPS Rating: *