Wednesday, March 12, 2014

FTC Opens Investigation Into Herbalife

It looks like the hedge fund manager who shorted Herbalife's stock got his wish.  Its stock price fell by around 15% after the FTC notified Herbalife that it would be subject to an investigation.  The distribution strategy employed by Herbalife is quite common.  Herbalife probably would not have been subject a FTC investigation without the campaign conducted by the hedge fund.  Perhaps it would be a good time to short the stock of companies whose distribution practices are similar to that of Herbalife.

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