Carl Icahn (Trades, Portfolio) solidified his unbelief in Pershing Square investor Bill Ackman (Trades, Portfolio)’s negative thesis on Herbalife two weeks ago when he added several million more shares to his long position in the company. Friday, he intensified the battle by slightly raising his bet on the nutrition multi-level marketer again.
The outspoken activist investor bought 306,846 shares of Herbalife (HLF, Financial), adding to his Aug. 26 buy of 2,304,683 shares. That purchase came on the same day Ackman told CNBC that investment banker Jeffries had contacted him to ask if he wanted to buy some of Icahn’s Herbalife shares, saying Icahn was “obviously a seller now.”
“This is a confidence game. And confidence games – Carl I would say is the leader in what creates the confidence in the company,” he said. “If Carl sells, it can accelerate the demise of the company.”
Icahn denied the story in a lengthy statement on his website.
“But completely contrary to what Bill Ackman (Trades, Portfolio) stated on television today, I have never given Jefferies an order to sell any of our Herbalife shares,” Icahn said. “Last month we publicly disclosed that Herbalife granted us permission to go up to 35%. At the time of the disclosure, Ackman declared that I have no interest in increasing my position in Herbalife. This was obviously another misstatement of the facts by Ackman since today I bought another 2.3 million shares.”
Despite the raised ownership cap, Icahn still holds only 20.78% of his permitted 34.55% of outstanding shares.
The fight triangle intensified further last week when Herbalife fired back at Ackman with the first in a series of videos on a website, TheRealBillAckman.com, meant to attack his professional history and dogged, costly campaign against the company that has drawn on since 2012.
Herbalife’s shares have gained 15.4% year to date and are priced around $62.14 Monday afternoon. The price saw its sharpest increase, roughly 21%, on Feb. 21, when the company announced fourth-quarter earnings results that showed year-on-year growth in sales and earnings.
Herbalife also lowered its 2016 earnings per share guidance to a range of $4.05 to $4.50 from its previous range of $4.35 to $4.75 “solely to reflect current FX ranges,” taking 80 cents per share.
Ackman’s Pershing Square returned 6% for the month of August but remains at a loss for the year of 13.4%.
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