Just days after announcing a record first quarter of $964.2 million in net sales—a 21 percent increase over the prior year period—global nutrition giant Herbalife entered into an agreement with Merrill Lynch International to repurchase $427.9 million of Herbalife’s common shares.
The move came on the heels of a three-day stock slide after short-seller David Einhorn raised a few unusual questions during the recent conference call with analysts. Herbalife responded in kind, calling his questions “elementary” and saying it was looking at its stock buy-back program as an opportunity. Herbalife stated it would buy back the shares because it felt they were undervalued. Analysts also responded quickly and very favorably to Herbalife’s performance. The transaction is expected to be completed by July.
To read Herbalife’s responses to Einhorn’s questions, view the company’s “Follow up on 1Q 2012 Conference Call” quarterly supplement here.
For more information on Herbalife’s quarterly earnings, go to www.herbalife.com