While Herbalife was buying back its stock last quarter, hedge funds were selling.
The controversial nutritional supplements marketer became a hedge fund battleground stock last year, with more than a dozen lined up against activist Bill Ackman, who has a $1 billion short on the company he alleges is a pyramid scheme.
Herbalife has denied the accusation, and many hedge funds agreed — led by Carl Icahn, who owns 18.5 percent of the shares and has five people on its board.
As Herbalife bought back 4.3 million shares in the quarter ended June 30, hedgies took the opportunity to unload even more, dumping about 5 million shares, regulatory filings show.
Two of the biggest hedge fund names in the stock — George Soros and Richard Perry — cut their Herbalife stakes marginally, while six smaller funds sold out altogether, filings show.
Soros still had more than 4.7 million shares after selling 165,000, while Perry has 4 million after shedding 800,000. They remain among Herbalife’s top 10 holders.
Smaller hedge funds Owl Creek, Arrowstreet, Lonestar, Beach Point Capital, Hayman Capital and Palestra sold their entire positions, totaling more than 2.5 million shares.
Hayman’s Kyle Bass has been one of the more outspoken proponents of Herbalife, claiming last year that his staff members all signed up as distributors and profited from selling the product.
Hedge fund heavyweight DE Shaw sold 1.7 million shares — leaving it with only 130,357 at the end of the second quarter.
Herbalife hit $65 in June but has traded down since the company reported its first earnings miss in more than two years in late July. The stock closed Thursday at $52.35.