Herbalife Shares Jump After Company Finishes Re
Another day has brought more bad news for William A. Ackman's bet against Herbalife.
The nutritional supplements maker disclosed on Monday that its auditor, PricewaterhouseCoopers, had finished re-auditing its books for its last three fiscal years, as well as for the current year - and made no material changes to the statements.
Shares of Herbalife predictably leaped once they re-opened for trading following the company's announcement. Just before the market close, they were up 11 percent at $76.01.
That represents yet more bad news for Mr. Ackman, whose Pershing Square Capital Management has lost more than $400 million short-selling the company's stock, which he hopes will go down once Herbalife is unveiled as an illegal pyramid scheme ripe for collapse. Herbalife unsurprisingly denies the accusation.
But the hedge fund mogul's very public fight has made him a target for other investors - including many of the most prominent financiers around - looking to profit from his pain. They have pushed up the price of the company's shares, making it significantly more expensive for Mr. Ackman to cover his losing bet.
That hasn't deterred the Pershing chief from his cause. Last month, he publicly declared that he would continue his assault 'to the end of the earth.'
Monday's announcement comes eight months after KPMG resigned as the supplements producer's auditor, following the revelation that a senior executive at the accountancy had leaked confidential financial information about the company to a stock trader.
In May, Herbalife said that it had hired PricewaterhouseCoopers, which re-examined the company's books in light of the scandal.
KPMG's resignation as the auditor of record was coincidental to Mr. Ackman's bigger fight against the company. But the hedge fund manager still used the accountancy switch as another front in his war: He suggested that PricewaterhouseCoopers suffered a conflict of interests, since its non-accounting arm had done work for Herbalife in the past.
A representative for Mr. Ackman's firm declined to comment.
Post a Comment for "Herbalife Shares Jump After Company Finishes Re"