Three of the top 20 investors in Herbalife Ltd. liquidated their positions during the fourth quarter when the nutrition and weight loss company missed Wall Street earnings estimates, but Soros Fund Management increased its holdings by roughly 80 percent, regulatory filings show.
Hedge fund manager Richard Perry, who had been Herbalife's fifth-largest shareholder, dumped his firm's entire 5.6 million-share stake sometime between October and the end of December, a filing with the Securities and Exchange Commission shows.
Soros Fund Management, which ranked among the 15 largest investors, had a different take on the company, however, adding 1.5 million shares to own 3.4 million shares at the end of December. Investors are required to tell the U.S. regulator what U.S. stocks they owned 45 days after the end of the quarter.
Investments in Herbalife have been closely watched since activist investor William Ackman first accused the company of running a pyramid scheme in 2012 and rival investor Carl Icahn became the company's biggest owner in 2013. Herbalife has steadfastly denied Ackman's charges of being a fraud. The company is being investigated by state and federal regulators.
While Ackman and Icahn stuck with their respective bets on the short and long side, other prominent investors sold as the company's share price fell 50 percent last year.
Hedge fund Okumus Fund Management got rid of all of its 1.9 million shares and Tiger Consumer Management, which owned 1.8 million shares, liquidated its position as well.
Herbalife said on Nov. 3 that it had missed quarterly earnings targets for the second time in a row when its third-quarter profit tumbled 92 percent. The company also warned that net sales would drop in the fourth quarter.
Kerrisdale Capital, run by Sahm Adrangi, also liquidated its holdings, selling 63,588 shares.
Huber Capital cut its stake 13 percent to 1.6 million shares.
But as the share price fell, Soros Fund Management snapped up more shares, the filing shows. In the third quarter, the firm, which manages the personal fortune of billionaire investor and philanthropist George Soros and his family, slashed its stake by 60 percent. Soros bought into Herbalife in the second quarter of 2013, and benefited from the stock's 145 percent gain in 2013.
This year, Herbalife's shares have fallen 8.65 percent.
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