Why Are Herbalife Ltd. (HLF) Shares Gaining Momentum?

Among the steps that Herbalife has taken to combat these claims, the most notable are the hiring of investment bank Moelis & Co. to serve in an advisory role in the last full week of December, and the hiring of Boies, Schiller & Flexner, the prominent law firm. Originally reported by FOX Business Network earlier today, the firm’s chairman David Boies, will be in attendance at Herbalife’s investor conference this Thursday.

On the air Tuesday, Charlie Gasparino says that his presence indicates “an interesting dynamic here, where the company is putting a stake in the ground saying: if you mess with us, we are going to come after you.”

Additionally, Gasparino had this to say: “We should point out the the SEC investigated Herbalife […] they apparently dropped the investigation […] it looks like Ackman wants them to reopen the investigation.”

Interestingly, Robert Chapman, the manager of Chapman Capital, released a bullish note to investors late last week. The purpose of the letter can essentially be summed up in its title (via CNBC): “Herbalife: Why I Made It a 35% Position after the Bill Ackman Bear Raid.“

Additionally, Gasparino reported via Twitter that Chapman had “big news” with regard to Ackman and Herbalife. We can only speculate what this news may be, but here’s the tweet below:

Interestingly, Gasparino followed up this tweet a little over a half-an-hour later.

Obviously, this saga is far from over, but it’s clear that the markets are responding positively to Herbalife’s defensive tactics against Bill Ackman.

Let us know your thoughts in the comments section below, and for more related coverage, continue reading here:

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Disclosure: I have no positions in any of the stocks mentioned above