Shares of Herbalife Nutrition (HLF) plunged in morning trading after Icahn Enterprises (IEP), its largest shareholder, disclosed in a regulatory filing that it is tendering about a quarter of the shares it currently owns.

Icahn to sell part of stake

In a regulatory filing, Carl Icahn's Icahn Enterprises said it is tendering up to 11.4M Herbalife shares, or about a quarter of the 45.7M shares it currently owns. "For almost six years, we have been one of Herbalife's strongest, most loyal supporters; we stood by the company through a half-decade long short-selling campaign; and we never sold a share, even after our investment doubled," said Icahn Enterprises Chairman Carl Icahn. "But, given that our Herbalife investment has become an outsized position, representing approximately 24% exposure to total NAV, it is only prudent for IEP to reduce its exposure. IEP's investment in Herbalife is a quintessential example of our activist investment strategy," he continued.

Icahn also said "We believe Herbalife's business is stable, the short-sellers have largely exited, and the company is well-positioned for the future." Icahn Enterprises first acquired Herbalife shares in late 2017, and said since then, almost $7B of value has been created for Herbalife investors.

What's notable

In February, Bill Ackman's Pershing Square hedge fund closed out its well-publicized short position. This also ended the high-profile feud with Carl Icahn, who was bullish on the stock. Speaking on CNBC on March 1, Icahn said he thought Ackman would get out of his Herbalife short position sooner, while adding that he put up a "good fight." Icahn also pointed out that he has not sold "one single share" of Herbalife as of that time.

Price action 

Herbalife is down 7.2% to $50.00 in morning trading.