hen again, maybe this whole sorry episode has longer to run. As Peter Henning writes in the New York Times today, there may be at least one more twist to come:
If the F.T.C. does start an inquiry, it is not clear that the agency would reach the same conclusion as Mr. Ackman about Herbalife. In addition, any inquiry would take months – and probably years – to sort out. The stock market’s reaction to such a disclosure, however, will be much more immediate, and I expect quite negative to Herbalife’s shares.
The hedge funds fighting over Herbalife are unlikely to wait around to see how an investigation might conclude, so any quick hit to the company’s stock price is much more important for them. In the push and pull of investor sentiment over Hebalife, the key may well be whether the F.T.C. decides to investigate the company’s operations.