One of the longest and most colorful battles in Wall Street history is over.

Bill Ackman has almost entirely exited his investment position in Herbalife Ltd., ending a campaign to drive down the company’s share price that lasted more than five years, according to a person familiar with the matter. The move follows a steady rise in the shares of the Los Angeles-based company, which Ackman repeatedly called an illegal pyramid scheme and vowed to destroy.

Ackman had already signaled that he was stepping back from his fight against Herbalife, which sells weight-loss shakes and vitamins. The 51-year-old billionaire said in November that his fund, Pershing Square Capital Management, has shifted its “short” position to put options — a move that limited the downside risk. He has since effectively sold all of those holdings, said the person, who asked not to be identified because the matter is private.

A representative for Pershing Square declined to comment.


With a short bet, an investor has to cover the position if the stock rises. Options, meanwhile, expire without taking an additional hit. Both kinds of investments could have made money if Herbalife’s shares had declined enough.

That didn’t happen. Shares in Herbalife have more than doubled since the day before Ackman disclosed his position on Dec. 12, 2012.

The stock rose a further 11% in trading Wednesday in New York, reaching a record $95.93. The run-up followed the announcement of several strategic initiatives to enhance shareholder value, including potentially buying back up to $650 million worth of its shares.

Herbalife also announced it would change its name to Herbalife Nutrition Inc., potentially giving the business more of a health-conscious halo. Management has repeatedly denied the pyramid-scheme allegations.


Ackman had accused Herbalife of being an illegal operation that relied on an army of outside distributors to recruit members with get-rich-quick schemes. He kicked off the campaign with a $1-billion bet against the company in 2012 and spent millions to investigate the business. He once delivered an emotional, nearly four-hour anti-Herbalife presentation that backfired — lifting the shares 25% that day.

But the crusade had its successes. Ackman’s complaints triggered an investigation by the U.S. Federal Trade Commission in 2014, and Herbalife ultimately reached a $200-million settlement with the agency. Under the agreement, the company had to rein in its business practices — a move that Ackman said would cripple it. In the end, the reckoning never came.

The short position also put Ackman at odds with another billionaire investor, Carl Icahn, who became the company’s biggest holder. Icahn has defended Herbalife’s multilevel-marketing model and publicly assailed Ackman — on stages, television, in documentaries and online — since an initial CNBC phone-in fight between the two billionaires.

CNBC was the first to report Ackman had sold his position in Herbalife.


Scott Deveau writes for Bloomberg.