Bill Ackman’s Pershing Square Capital Management intends to file a complaint with the Securities and Exchange Commission regarding recent trading in Herbalife shares, The Post has learned.
Reports that George Soros’ hedge fund has bought a big stake in Herbalife sent the stock of the nutritional supplements company soaring yesterday, closing at $65.50, up 9 percent.
The Soros stake was first reported by CNBC today, however rumors of Soros’ involvement had been swirling through the market for weeks.
Soros portfolio manager Paul Sohn had been looking at a potential investment in Herbalife for at least a month, and was hosting “idea meetings” to pitch the trade to other hedge funds, according to sources.
The Soros portfolio manager told other hedge funds that it had a position just shy of 5 percent that would soon be disclosed in regulatory filings, and pointed out that Carl Icahn had a 16.5 percent stake. Sohn did not return a call for comment.
Bill Ackman has a $1 billion short on Herbalife, believing it is a pyramid scheme that regulators will shut down.
The Soros name adds credibility to the long position.
“George Soros broke the Bank of England,” Sohn told other hedge-fund managers, according to sources. “George Soros can break the back of Ackman.”
When Icahn was asked last week at a conference whether Herbalife would be the “mother of all short squeezes,” as he had mentioned on TV earlier, he said that it had already become the “daughter of all short squeezes.”
If hedge funds tried to orchestrate a short squeeze, it would be an illegal form of stock manipulation.
Ackman has confirmed that he has not covered his short, despite being now in the red about $300 million as of yesterday’s close.
Icahn told The Post he had not been in contact with anyone from Soros team for at least three years and did not know if the rumors of Soros’ investment are true. But if they are, he added, “I am extremely pleased.”
mcelarier@nypost.com