GNC investors had a brief panic attack on Tuesday.
Shares of the nutrition store plummeted as much as 27% over fears it was about to be slapped with new legal charges.
However, those fears turned out to be unfounded. The Justice Department filed fraud charges on Tuesday against USPLabs, an unrelated entity that makes dietary supplements such as Jack3d.
GNC shares rebounded from the lows amid relief that it was not the subject of the new law enforcement action. Still, GNC closed down 6% on the day.
Wall Street assumed the charges were going to be be lobbed at GNC because it has been caught up in legal problems recently. Oregon’s attorney general accused GNC last month of selling dietary substances laced with an “amphetamine-like” substance. GNC denied the Oregon claims and has said it will “vigorously defend” itself against the charges.
Other companies that sell health and nutritional products were also under pressure on Tuesday. Shares of GNC rival Vitamin Shoppe slumped 5%, while Herbalife fell 1%. Both stocks had been down more before the DOJ charges were announced.
–CNNMoney’s Jackie Wattles contributed to this report.
