UPDATE 1: CNBC's Herb Greenberg, citing an unnamed source, reports that the FTC's press conference about an allegedly illegal pyramid scheme does not have to do with Herbalife.
UPDATE 2: The Kentucky AG presser is about Fortune Hi-Tech Marketing. Watch it here >
Shares of Herbalife, the multi-level marketing firm that hedge fund titan Bill Ackman is shorting because he thinks it's a "pyramid scheme", were getting smoked moments ago.
The stock was trading down about 9%. It's now down about 4.5%.
Another multi-level marketing company, Nu-Skin, was getting slammed as well. It was last down 4.4%.
Nobody had any idea what was going on.
Traders got jitters about an FTC announcement in Kentucky that will target an allegedly illegal pyramid scheme.
There was no evidence that it had anything to do with Herbalife, which is based in California, but the news of the FTC going against anyone was being cited as an excuse for the selloff.
The Federal Trade Commission will co-host a press conference in Lexington, KY, today at 1 p.m. ET (Noon Central Time), with the Kentucky Attorney General’s office, to announce a major action against an allegedly illegal pyramid scheme.
Steve Baker, Director of the FTC’s Midwest Region Office, and Kentucky Attorney General Jack Conway will be available to answer reporters’ questions.
Check out the HLF chart here.
Here's NuSkin's chart:
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