Hedge fund manager Bill Ackman laid out his bearish thesis on Herbalife (NYSE: HLF) Thursday, calling the company a pyramid scheme, revealing that he was short 20 million shares, and putting a $0 price target Herbalife's stock.

Shares of Herbalife dropped on Wednesday when his short position was first reported, dropped further on Thursday after the presentation, and fell again on Friday as traders digested the implications of Ackman's bearish argument.

Early Friday afternoon, shares of Herbalife were down well over 17 percent trading below $28 per share. Shares started the week around $44.

Ackman's thesis may ultimately prove true. His argument was deeply researched, and, if he is short 20 million shares, it's a pretty significant bet -- even for a hedge fund manager with as many resources as Ackman.

However, the timing of the argument is curious, as Herbalife itself noted.

In a release following the reports of Ackman's short bet, Herbalife commented, "An extraordinary number of puts on our stock are due to expire this Friday. We previously learned this activity was pegged to some kind of 'significant event.' Mr. Ackman suddenly announced [Wednesday] that he will make a presentation on Herbalife on Thursday, the day before the puts expire."

Addressing this, Ackman said that he owned no puts. Further, perhaps to dispel the notion that he was manipulating the stock for his own gain, he said that he would donate the profits of his Herbalife short position to charity.

Still, there are a number of notable points about the position that remain mysterious. Why did Ackman lay out his bearish thesis the day before options expiration? Why did he call a special session of Ira Sohn at which he was the only presenter?

Hedge fund manager David Einhorn hopped on the Herbalife's earnings call back in May. He asked a few questions, which, given Einhorn's track record as a short seller, lead to a sharp sell off in the stock from which Herbalife never recovered.

Market commentators across the board speculated that Einhorn was shorting Herbalife, although Einhorn himself never confirmed that or even mentioned Herbalife again.

In fact, at a conference following that Herbalife call, Einhorn gave a presentation on various ideas he had about stocks. When the presentation wrapped up, traders -- realizing that he didn't mention Herbalife -- began bidding up shares and Herbalife rapidly rallied.

If Ackman does indeed have 20 million shares, then his position represents the vast majority of Herbalife shares sold short, so there would be little room for Einhorn to have anything amounting to a meaningful short position.

Einhorn's spokesman did not return a request for comment on Einhorn's relation to Ackman in regards to Herbalife.

Reuters reported on Thursday that distinguished short seller Jim Chanos "may" be short Herbalife as well. Chanos did not return a request for comment.

Still, despite Ackman's bearish thesis, and the possibility that Einhorn and Chanos could also be involved in some manner, many Herbalife analysts weren't worried.

Analysts at Canaccord summarized the situation as "another round of MLM attacking."

Canaccord denounced the idea that MLM businesses were a scam, noting that attacking MLMs is a frequent trend on Wall Street that pops up "about every five years."

Although Canaccord's analysts did not accuse Ackman directly of committing any form of stock manipulation, they did reference a previous short seller -- Barry Minkow -- who is currently in jail. Minkow also attacked Herbalife, before being sent to prison over his manipulation of Lennar (NYSE: LEN) stock.

Analysts at D.A. Davidson made similar remarks, writing, "Ackman made a bet on the company's collapse. We will gladly take the other side of that bet. In our view, Herbalife has really never been more exciting than today and Mr. Ackman may have to wait another 32 years to see the growth at Herbalife decelerate."

Herbalife shares traded near $27.80 on Friday.

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