On Monday, embattled nutritional products-maker Herbalife said that an activist investor will get more seats on its board. The news sent HLF stock surging more than 5% in morning trading.
HLF stock gained after Herbalife said that it would hold an election to place three candidates backed by Carl Icahn on its 13-member board. Carl Icahn holds 16.8% of HLF stock, making him the company’s largest shareholder, Reuters notes.
With the addition of the three new directors, Carl Icahn will have a total of five directors on Herbalife’s board. In a statement, Carl Icahn reaffirmed his commitment to Herbalife.
HLF has come under increasing scrutiny over its business practices. Prominent investor William Ackman has called the company a “pyramid scheme.”
Earlier this month, the U.S. Federal Trade Commission announced that it has initiated an inquiry into the company’s operations.
HLF stock has gained about 35% over the past year. HLF stock closed at $49.54 a share on Friday.