Herbalife ($HLF) stock shows strong movements in its Friday trading sessions. The stock recorded intraday high of $52.20, before closing at $52, up 4.12%. The company stock reacted to the news of the resignation by Federal Trade Commission Chairwoman Edith Ramirez. She had been a vocal opponent of the company’s marketing practices. The investors have viewed the resignation as a positive news for the company.
Herbalife has been under FTC radar for quite some time. Last year, the company was made to agree to a $200 million settlement with the FTC for compensating its distributors. Herbalife was also ordered by the commission to change its policy to payment on actual sales basis.
The company on a good start this year as it notches up nearly 8% growth this year so far. Apart from the latest news, Herbalife has another development in its favor. President elect Donald Trump picked Carl Icahn as his special consultant. Icahn is a well-known supporter of Herbalife.
During 2016, Icahn made several investments in the company including his November purchase of 1.8 million share at the average price of $54.70. With these investments, Icahn has nearly 23% stake in the company. The appointment of Icahn is likely to play out well for Herbalife.