Herbalife Audited Books Crushing Bill Ackman

The re-audit was occasioned by the withdrawal of KPMG as Herbalife’s auditor following revelations that a former partner in the auditing firm was fired for providing insider information to outside parties. The re-audit was conducted by PricewaterhouseCoopers LLP, Herbalife’s new auditing firm.

The report comes as more bad news for Bill Ackman and Pershing Square Capital Management which has taken a well-publicized $1 billion short position in Herbalife, accusing the company of being a pyramid scheme. Unless some damning evidence falls out of the sky, Ackman’s last hope for any success with this investment is that some agency of the federal government will announce that it is launching an investigation into the allegations. That could happen but it looks like a longer and longer shot.

Herbalife, meantime, is getting a nice boost from the announcement. The company’s stock is up more than 8% at $73.87, and came within pennies of its 52-week high of $77.39 earlier this afternoon. The stock’s 52-week low is $24.24, set shortly after Ackman made his allegations in late December last year. Investors came back to Herbalife after the initial drop as the company continued to report good results and buy back more stock.