Ackman is genuinely right about Herbalife. His mistake was thinking he could convince the fed to go after it and/or otherwise get it shut down.

While he didn't succeed in getting the FTC to sue them (which would almost inevitability lead to the company being shut down), they did end up passing reforms that will cripple the business if it is indeed a pyramid scheme. Not sure how it affects them outside the US but I think HLF is going to die over the next few years within if it can't make much revenue from recruiting.

Do you have any evidence that he was naked short? I can't think of a way how this would be acceptable from a regulatory perspective. I think a lot of his short exposure was through derivatives rather than cash anyway.