Has Carl Icahn Rushed To Claim Victory In The Herbalife (HLF) Fiasco?

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Billionaire Carl Icahn has emerged as a winner from another battle of titans. Or so it seems. When Herbalife Ltd. (NYSE:HLF) agreed to a $200 million settlement with Federal Trade Commission on Friday, Icahn quickly issued a statement, reiterating his firm belief that the company is not a “pyramid scheme.” Through Icahn Capital and its affiliates, Carl Icahn holds exactly 17 million shares, which represent 18.3% of Herbalife’s common stock.

Carl Icahn as viking

Icahn has issued a statement together with a recent filing with the SEC, where he wrote that “the FTC settlement announced today, coming after a two-year investigation also concluded that Herbalife is not a pyramid scheme – a conclusion that obviously vindicates our research and conviction.” The controversy surfaced several hours later when FTC chairwoman Edith Ramirez said: “They [Herbalife] were not determined not to be a pyramid. That would be inaccurate.” The use of a double negative has left investors uncertain and it came down to Icahn to appease market participants again. In an interview on Monday, Icahn said: “If the FTC thought we were a pyramid scheme, in my opinion they would have not settled; they would have tried to shut us down.” Carl Icahn has emerged the big winner from this debacle, netting an estimated $457 million in profits according to Fortune. At the other end of the stick is Bill Ackman, the one who started it all by criticizing Herbalife Ltd. (NYSE:HLF)’s business model and whose losses are close to $500 million according to the same source.

Hedge fund interest in Herbalife Ltd. (NYSE:HLF) picked up during the first quarter, with the number of long positions among the funds tracked by Insider Monkey rose to 37 at the end of March, from 31 registered three months earlier. David E Shaw’s D E Shaw also held a significant positions, having boosted it by 449% during the quarter. According to its 13F filing, the fund held 3.34 million shares at the end of March. William Duhamel’s Route One Investment Company was not far behind, having amassed 3.15 million shares during the quarter.

You can access the original SEC filing by clicking here.

Ownership Summary Table

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
High River Limited Partnership 3,399,999 0 3,399,999 0 3,399,999 3.66%
Hopper Investments 0 3,399,999 0 3,399,999 3,399,999 3.66%
Barberry Corp 0 3,399,999 0 3,399,999 3,399,999 3.66%
Icahn Partners Master Fund 5,430,218 0 5,430,218 0 5,430,218 5.85%
Icahn Offshore 0 5,430,218 0 5,430,218 5,430,218 5.85%
Icahn Partners 8,169,783 0 8,169,783 0 8,169,783 8.80%
Icahn Onshore 0 8,169,783 0 8,169,783 8,169,783 8.80%
Icahn Capital 0 13,600,001 0 13,600,001 13,600,001 14.66%
IPH GP 0 13,600,001 0 13,600,001 13,600,001 14.66%
Icahn Enterprises Holdings 0 13,600,001 0 13,600,001 13,600,001 14.66%
Icahn Enterprises G.P. Inc 0 13,600,001 0 13,600,001 13,600,001 14.66%
Beckton Corp 0 13,600,001 0 13,600,001 13,600,001 14.66%
Carl C. Icahn 0 17,000,000 0 17,000,000 17,000,000 18.32%

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Page 1 of 19 – SEC Filing

Washington, D.C. 20549
Under the Securities Exchange Act of 1934
(Amendment No. 7)*
Herbalife Ltd.
(Name of Issuer)
Common Shares, par value $0.001 per Share
(Title of Class of Securities)
(CUSIP Number)
Andrew Langham, Esq.
Icahn Capital LP
767 Fifth Avenue, 47th Floor
New York, New York 10153
(212) 702-4300
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 15, 2016
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Section 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box  / /.
NOTE:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d‑7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

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