Bill Ackman, founder and chief executive officer of Pershing Square Capital Management, speaks during the 20th Annual Sohn Investment Conference in New York on May 4, 2015.
Photograph by Andrew Harrer — Bloomberg/Getty Images
By Reuters
August 12, 2016

One of Herbalife’s largest investors sold more of the company’s stock, just weeks after the U.S. government told the protein shake maker to reorganize its business, according to a filing with the U.S. Securities and Exchange Commission.

In an SEC filing on Wednesday, Fidelity, the second largest investor in Herbalife (hlf), said it had cut its stake in the firm to 7.4 million shares, a 14% reduction from the 8.6 million shares it reported owning at the end of June.

“The fact that Fidelity is selling is a good sign,” said Bill Ackman, the billionaire hedge fund manager who bet $1 billion that Herbalife’s stock would collapse.

Fidelity declined to comment.

The mutual fund’s portfolio managers, including Steve Wymer of Fidelity Growth Company Fund, have been cooling on Herbalife in recent months. Boston-based Fidelity funds cut their stake in Herbalife by 26% in the second quarter, disclosures show.

Sales after the Federal Trade Commission fined Herbalife $200 million on July 15 could suggest sentiment may be souring more quickly on the $6 billion market cap nutrition and weight loss company.

The FTC ordered Herbalife to hire a monitor to track product sales and said the company had been deceiving hundreds of thousands of hopeful people.

Ackman, who has lobbied the government to shut Herbalife down, has called the company a pyramid scheme.

“There is no longer a bull case to be made for this stock,” Ackman said on Thursday evening. With the stock price up 22% this year, he is sitting on several hundred million dollars of paper losses.

Ackman made his remarks after a screening of “Betting on Zero,” a film that details his four-year battle with Herbalife.

Herbalife declined to comment, but the company’s stock has rallied about 10% since the FTC fine was announced.

Other large investors, including Credit Suisse, Blue Mountain Capital Management and TIAA Cref Investment Management have also cut their stakes in the second quarter, according to new regulatory filings.

Some investors have loaded up on Herbalife, however, including William Blair Investment Management, which bought 1.5 million shares during the second quarter, SEC filings show.

Billionaire Carl Icahn, Herbalife’s largest investor, has five representatives on the board. He owned 17 million shares on March 31 and has not yet released second-quarter holdings.

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