How Carl Icahn Is Destroying One Recent Herbalife Short Thesis

Herbalife Ltd. HLF shares are up 2.3 percent Monday after Carl Icahn put to rest any speculation that he may be worried about his Herbalife investment ahead of the upcoming release of the “Betting On Zero” documentary.

The movie, which opens in the United States on March 17, follows Pershing Square Capital manager Bill Ackman’s $1 billion short bet on Herbalife and his drive to expose the company as a pyramid scheme.

Last week, QTR Research outlined its short thesis on Herbalife's stock ahead of the documentary’s release. The firm argued “Betting On Zero” could have a negative impact on market sentiment the same way “Blackfish” hurt SeaWorld Entertainment Inc SEAS’s reputation and share price.

One of the key elements of QTR’s short thesis involved speculation about billionaire Icahn Enterprises LP IEP CEO Carl Icahn.

“I believe Mr. Icahn may consider exiting his Herbalife position before the documentary’s March 17, 2017 release or before the FTC’s sanctions on Herbalife’s business model take effect in May 2017,” QTR wrote.

Related Link: QTR Research Provides New 28-Page Bearish Report On Herbalife

As it turns, out, Icahn is doing quite the opposite. According to Icahn’s latest filings, he recently purchased 372,342 additional shares of Herbalife at an average price of $51.35/share. The new buy ups Icahn’s stake in Herbalife from 24.1 percent to 24.5 percent.

While Herbalife investors may be concerned about “Betting On Zero,” they can at least take comfort in the fact that the stock’s largest investor doesn’t seem to have a care in the world when it comes to Herbalife.

QTR has a $30 price target for the stock.