Robert Chapman, one of the first and most vociferous Herbalife bulls, has exited his entire stake in the embattled weight-loss and nutritional supplements company, he said today.
The Los Angeles hedgie told The Post he has either sold or hedged out of his entire position.
The investor said he still believes in Herbalife but thinks the shares — which have bounced between $46 and $26 over the last two months — could come under some pressure in the near term.
The $4.4 billion company has operated for most of its 33 years far out of the media spotlight but has been in the headlines since Dec. 19, when activist investor Bill Ackman made a $1 billion short bet against it, calling the company a “pyramid scheme.”
The company strongly denied that charge.
Ackman foe Carl Icahn yesterday publicly revealed that he has taken a 13 percent stake in Herbalife — saying he didn’t believe in Ackman’s claims. “This is a boxing match, and you always want to bet on the guy who just got punched,” Chapman told The Post, referring to the Icahn-Ackman smackdown.
Chapman said the timing of the majority of Icahn’s Herbalife purchases — after the much-publicized TV debate with Ackman — tells him there is a “grudge component” to Icahn’s investment.
Herbalife shares jumped 17 percent early today, to $44.94, on news of the Icahn buy.
“The stock has overreacted to [the Icahn] news,” Chapman said.
Herbalife shares has sold off a bit after the robust opening and were up 7.4 percent in early-afternoon trading.
Chapman said that while he does not agree with activist Ackman that the company is a fraud, he said, “I expect that [the claim] will attract the attention of regulators some day, and I do not want to be long the day before a significant regulator has commenced an investigation of the company. That being said, I am extremely confident that the results of any such investigation will be benign and will vindicate Herbalife’s business model.”
Chapman recently visited Herbalife “quick response centers” and nutrition clubs in the Philippines on a due diligence tour of the company’s Asian operations and said “the results were extremely bullish.”
Chapman first commented on his latest Herbalife moves on Bloomberg TV this afternoon.