Carl Icahn Is Exiting His Herbalife Stake (Podcast)
Published: May 28, 2018

Carl Icahn Is Exiting His Herbalife Stake (Podcast)

May.27.18 | About: Herbalife Ltd. (HLF)

Quoth the Raven



On Friday, it was announced that Carl Icahn started exiting part of his stake in Herbalife.

Previously, I had written an article here on Seeking Alpha guessing that Carl maybe tendering some of his shares.

I discuss what news of Carl tendering means with Matt Stewart on a new podcast, as HLF shares were down almost 10% on Friday on the news.

On Friday, it was announced that Carl Icahn started exiting part of his stake in Herbalife (HLF). The first part of his exit came as he tendered over 10 million shares in the company‘s most recent tender offer, reportedly netting him over $550 million. In a podcast that I put out last week, Matt Stewart and I discussed possible ways for Icahn to sell his stake in the company. Also, previously, I had written an article here on Seeking Alpha guessing that Carl maybe tendering some of the shares back to the company as part of his exit plan.

Carl still owns over 20 million shares of the company and now that the market has been notified of his intent to exit, one would have to think that the rest of his exit would have to be timely in nature. While the stock traded almost 6,000,000 shares on Friday on the news, Mr. Icahn still probably couldn’t blow out the rest of his position on the open market if he wanted to.


ChartHLF Price data by YCharts


As I said in another article I wrote on this very website just days ago, the fundamentals of the company still look to be in a downtrend and in no way shape or form does Herbalife look like a growth story. This leaves me little reason to believe that Mr. Icahn would want to stay in the stock.

Regardless, in a small blog note that I wrote on Friday, I noted that Mr. Icahn did not say anything in his release on Friday about wanting to hold the rest of his shares. Previously, when Mr. Icahn had communicated to the market about Herbalife, he often noted that he did not have any intention of selling. We didn’t see any such language in Friday’s release from him.

In order to try and analyze the situation, as well as figure out how Mr. Icahn is going to exit the rest of his shares in the company, I asked Matt Stewart to come back on the podcast on Friday and have a discussion to update our previous discussion. You can listen to our full analysis of Mr. Icahn's Herbalife exit and what we think is coming next for the company here.