Herbalife slides after Carl Icahn sells $600 million of stock in the company

  • Shares of Herbalife were down as much as 3.2% in premarket trading on Monday following news that billionaire investor Carl Icahn will sell about $600 million worth of his stake in the nutrition supplements company. 
  • Icahn will also give up his firm's five seats on Herbalife's board. 
  • "…The time for activism has passed as the Company has grown, and I don't typically invest billions of dollars in companies where our role as activist is not needed," Icahn said on Sunday. "That being said, Herbalife Nutrition's products and business opportunity are needed now more than ever, and I look forward to remaining a shareholder of the Company."
  • Watch Herbalife trade live here.

Shares of Herbalife were down as much as 3.2% in premarket trading on Monday following news that billionaire investor Carl Icahn will sell about $600 million worth of his stake in the nutrition supplements company. The sale reduces Icahn's share of the company to about 6% from 16%. 

On Sunday Herbalife said that it reached an agreement to repurchase $600 million worth of shares owned by Ichan at a purchase price of $48.05 per share, the closing price of the stock on December 31.

The transaction is expected to close no later than January 7, 2021, and Icahn Enterprises will then hold about 8 million common shares of Herbalife Nutrition. 

Ichan will also give up his firm's five seats on Herbalife's board. Icahn began buying Herbalife shares in 2013 and is estimated to have made more than $1 billion on his Herbalife investment, according to Bloomberg. 

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In a Sunday statement, Ichan said that he began purchasing shares of Herbalife because he believed it was undervalued for reasons that he "thought made little sense."

"At the time, I believed the Company was in need of an activist and that certainly turned out to be correct," the investor said. "Yet, the time for activism has passed as the Company has grown, and I don't typically invest billions of dollars in companies where our role as activist is not needed. That being said, Herbalife Nutrition's products and business opportunity are needed now more than ever, and I look forward to remaining a shareholder of the Company."

Shares of Herbalife gained 3.38% in 2020. After hitting an intraday low of $20.73 in March, the company finished 2020 at $48.05 a share.

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