Herbalife (HLF), which makes weight-loss products, has been pummeled in the past two days following a grilling by activist investor David Einhorn. The company posted strong earnings, but the numbers were clearly overshadowed by Einhorn’s questions, which investors are taking as a sign that he is going short. (In fact, he might just present his case during his speech at the upcoming Ira Sohn conference, where investors are known to reveal their positions.)
Analysts have rushed to the company’s defense, pointing out that Einhorn’s questions — about the company’s disclosures r — have been raised before. The company also put out a statement saying “Mr. Einhorn’s questions raised no new subjects or concerns. They were elementary questions usually asked by investors new to our industry. These are issues that have been thoroughly addressed before.”
Early on Wednesday, the pushback appeared to have helped the shares. But shares slid again in midday trading, and by the late afternoon were down about 6%.
“With the pullback, we recommend investors be advantageous and purchase shares at the lower prices,” wrote Auriga analyst Gary Albanese today.
But with Einhorn’s shadow hanging over the stock, will anyone listen?
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