Herbalife Ltd.’s shares fell sharply for the second day following the hedge fund manager William Ackman’s critical presentation alleging the nutritional supplements company is a pyramid scheme.
Ackman said Wednesday that he has been shorting the company’s stock for several months. Short sellers earn money when a stock declines. Ackman told CNBC that he expects the Federal Trade Commission will take a “hard look” at the company, which signs up independent distributors to sell supplements, weight loss products and other items.
Herbalife Chairman and CEO Michael Johnson said that the allegation that Herbalife is a pyramid scheme is “bogus.”
News Tribune news services
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