Herbalife Drops After CNBC Says Ackman Is Short Company

Herbalife Ltd. (HLF) fell the most in more than seven months after CNBC reported hedge fund manager Bill Ackman has taken a short position on the company.

The shares slid 11 percent to $37.79 at 2:24 p.m. in New York and earlier dropped as much as 15 percent for the biggest intraday decline since May 1. Herbalife had declined 18 percent this year through yesterday.

Ackman, founder of New York-based hedge fund Pershing Square Capital Management LP, did research on the company for a year and considers Herbalife to be a “pyramid scheme,” CNBC reported. Ackman has sold the shares short for about seven to eight months and will present details of his thesis at the Sohn Investment Conference tomorrow in New York, CNBC said.

Julian Cacchioli, a spokesman for Herbalife, didn’t immediately return voicemail messages seeking comment.

Short-selling refers to the practice of borrowing shares and selling them, with the goal of profiting by repurchasing them later at a lower price.