Shares rose 2.78% to $53.70 in early trading.
Icahn disclosed today in a S-4 filing with the Securities and Exchange Commission that he purchased a further 372,324 shares in the group just as the stock was falling to a two-month low.
He bought stock at $51.35 each, increasing his holding in the company to 22.9mln shares or 24.6% of the shares outstanding. Ichan is the group’s largest shareholder.
Herbalife’s shares had fallen 16% in the previous three weeks and has lost 8.3% over the past 12 months.
The company issued a weak outlook on 23 February due to currency headwinds as it reported its fourth quarter results. It cuts its guidance for fiscal 2017 to adjusted earnings of $3.65 to $4.05 per share from a previous estimate of $4.60 to $5.00 per share.
For the first quarter, the company projected sales to drop 5% to 9% from the same period last year, reflecting a decline in volumes.
Icahn’s confidence in the company comes in contrast to billionaire William Ackman’s negative view on the stock. Ackman has called Herbalife a “pyramid scheme” and said he has bet $1bn that its shares would fall.
Story by ProactiveInvestors