Herbalife stock is now lower than when Bill Ackman started shorting it more than two years ago.
Shares of the controversial diet shake company hit a 52-week low Tuesday, falling 4.7 percent to close at $46.49.
Ackman shorted more than 20 million shares at an average estimated price of $48 per share beginning in May of 2012
The activist, however, still hasn't broken even on his $1 billion short because he was forced to convert some of the stock to long-dated options a year ago after a slew of big name investors — including Carl Icahn and George Soros — took the opposite side of his bet and drove the price up to the mid-$60s.
In January, it closed as high as $81.50.
The stock slide on Tuesday coincided with the publication of a "Seeking Alpha" blog critique of its nutrition clubs by Christine Richard, the researcher who brought the Herbalife short idea to Ackman in 2012.
Ironically, Ackman's July 22 nutrition club presentation, including Richard's analysis, had just the opposite effect — briefly sending the stock up 25 percent, to $68.
Richard's blog post made a new point: According to a recent court ruling on multilevel marketing company BurnLounge, she said, "regulators and courts want to know why people are consuming a product."
If consumption is required to "participate in a money-making venture" — as her research indicated is the case in Herbalife nutrition clubs — the company would be considered a pyramid scheme, she explained.
Herbalife denies it is a pyramid scheme and says people visit nutrition clubs primarily to consume a healthy product and lose weight.
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