Business

Loeb’s ‘long-term’ Herbalife investment lasted only 16 days

Sometimes a long-term investment can last just 16 days — at least if an investor gets spooked.

Just ask hedge-fund hotshot Dan Loeb, who said at a conference Tuesday that he decided to “take the money and run” after a winter purchase of Herbalife shares — less than a month after telling investors in his Third Point fund that he found the Los Angeles company a “compelling long-term investment.”

Loeb, in a Jan. 9 letter to investors in his $14 billion Third Point funds, put a price target on Herbalife shares of $55 to $68. They had closed at $38.35 the previous day.

But Loeb’s long-term horizon appears to have extended to just Jan. 25.

The billionaire investor said at Tuesday’s Dealbook Conference that he exited shares of the nutritional-supplements distributor at about $44. The shares closed at $43.59 on Jan. 25 — and then sold down to $35.07 over the next five trading days.

To be sure, Loeb said at an investment conference in May that he exited Herbalife after fellow activist investor Carl Icahn came upon the scene on Feb. 14. Word of Icahn’s investment sent shares of the company up 5.1 percent to $38.27 — far below the $44 price Loeb said Tuesday he sold at.

So what changed Loeb’s “long-term investment” mindset?

At the May conference, Loeb said he sold the shares because by that point “the stock had run its course.”

But in late January and early February, Loeb suggested a completely different reason for getting out, one pal told The Post.

Loeb changed his mind and quickly liquidated his Herbalife stake well below his price-target range at least partially because he received an inquiry from the Securities and Exchange Commission, two sources in separate interviews told The Post.

The 51-year-old investor was the first big name to oppose hedge fund activist Bill Ackman’s $1 billion Herbalife short.

Just weeks after Ackman famously declared Herbalife a pyramid scheme, Loeb took an 8.6 percent stake in the company, a regulatory filing and a letter posted on the Third Point web site revealed.

In the letter — released the day before Herbalife’s investor meeting to rebut Ackman — Loeb called Ackman’s views preposterous and said Herbalife was a “compelling long-term investment.” Third Point has since removed the letter from its website.

It is unclear what the SEC inquiry was about or who or what the subject of the inquiry was. However, no enforcement action was taken against Loeb or Third Point.

But the inquiry appears to have been enough to shake Loeb and may have moved him to sell his Herbalife stake.

It “totally freaked [Loeb] out,” one of the pals, whom Loeb has confided in for years, said of the SEC inquiry.

“Neither Third Point nor Daniel Loeb has been a subject of an SEC inquiry regarding Herbalife,” a Third Point spokesperson said Tuesday night.

The SEC declined comment.