Did David Einhorn Short Herbalife Ltd. (HLF) With Bill Ackman?

Shares of Herbalife Ltd. (NYSE:HLF) have fallen over 38% since last Wednesday, amid reports that Bill Ackman, manager of the hedge fund Pershing Square Capital Management, is short the stock. Check out Bill Ackman’s full 13F portfolio here. The nutritional supplement company has been walloped by Ackman’s claims that it is a “pyramid scheme,” according to CNBC.

In the time since, we’ve seen a war of words between Herbalife and Ackman, which began shortly after the story surfaced last week. On CNBC, Herbalife’s CEO Michael Johnson called Ackman’s allegations “blatant market manipulation,” adding that “we want the SEC to take action.”

Johnson’s chief claim: “This appears to be another attempt to illegally manipulate the market by a group of short sellers.”

In a presentation last Thursday morning at the Sohn Conference Foundation in Manhattan, Ackman detailed his short thesis on Herbalife, breaking down his argument into four pillars. These pillars include: (1) questionable R&D practices, (2) mentions that Herbalife buys their credibility, (3) the assertion that around 90% of payments are incentive-based, and (4) evidence of bubble-like trends in multiple countries. See our full recap of his presentation.

During his subsequent media tour, Ackman shared more details about his research, and most notably, the size of his short position. In an interview with Bloomberg Television, the hedge fund manager discussed his short position in Herbalife, saying, “It is enormous. It is over 20 million shares…We are short over 20 million shares.”

In an interview with CNBC, Ackman said that he established the position “seven months ago, or so.”

This disclosure is crucial to understanding the full scope of the battle that’s shaping up between Ackman and Herbalife.

Continue reading to see just how…