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Report: SEC opens inquiry into Herbalife

Published on NewsOK Modified: January 9, 2013 at 4:13 pm •  Published: January 9, 2013

Another well-known investor, Greenlight Capital's David Einhorn, raised concerns about Herbalife's business in May.

The company plans to give a comprehensive response to investor questions on its business model on Thursday morning during an analyst and investor meeting.

Herbalife got a boost of confidence on Wednesday from another prominent hedge fund manager, Third Point LLC's Dan Loeb, who disclosed in a filing that Third Point owns 8.9 million Herbalife shares.

Trading of the stock was briefly halted Wednesday morning following a 9 percent spike on news of Loeb's investment. Shares were choppy after trading resumed, and the stock ended up gaining $1.42, or 3.7 percent, at $39.77.

The stock hit a low of $24.24 in late December as a result of Ackman's allegations, their weakest level since July 2010. Shares have lost close to half their value since the end of April.

Herbalife, which is incorporated in the Cayman Islands and has its principal operating subsidiary in Los Angeles, sells its products in more than 80 countries through 2.5 million independent distributors.