Bill Ackman has revealed that he “is just getting started with his short on Herbalife Ltd. (NYSE:HLF). It appears that the hedge fund manager is doubling down on his bet, and is not likely to give up despite the substantial rebound in Herbalife stock since the stock market returned.

Bill Ackman

The hedge fund manager made the comments to a reporter at Bloomberg. Ackman is trying to bring Herbalife Ltd. (NYSE:HLF) to the attention of the Federal Trade Commission, in the hopes that it will be declared a pyramid scheme, and its business will be made illegal.

Herbalife CEO Michael Johnson denies the allegations, and asserts that a Belgian court which declared the company’s business model a pyramid scheme last year, is likely to uphold an appeal currently being made by the company. A spokesperson for Herbalife, quoted by Bloomberg, stated that the judgement in that case contained factual errors.

Herbalife Ltd. (NYSE:HLF) operates what is known as a multi-level marketing operation. They sell products to distributors who sell to clients, and recruit other distributors. Each distributor takes a portion of the sales of those he or she recruited into the company’s business.

Ackman has stated bluntly that the company is a pyramid scheme. Rebounds in the company’s stock price have not swayed him from his belief that his thesis will ultimately be proven factual, and profitable. Those going against him on the trade assert that the firm’s international distribution and healthy profits, added to a short squeeze, mean it will likely outlast his short.

Ackman is, however, known for holding onto positions he believes in for as long as the take to bear fruit. His current activist role at J.C. Penney Company, Inc. (NYSE:JCP), and his six year short of MBIA Inc. (NYSE:MBI) are evidence of that characteristic.

The Pershing Square Capital Founder may lose in the short term, but he doesn’t seem to be looking at the short term. He appears dead set on having federal regulators swoop down on Herbalife and close up shop. That could take months, or even years.

But, according to his statements, he believes that the work he has already done should speed up the execution of a case against the company. Ackman says that his firm has provided the “legal roadmap for regulators to determine it is a pyramid scheme.” All he really needs is for regulators to take the bait he is offering.

The Federal Trade Commission has yet to make any comments either way about Herbalife Ltd.  This week will probably be the most important thus far in the battle between Bill Ackman and Herbalife Ltd. (NYSE:HLF). Thursday, January 10, sees a Herbalife conference at which the company will provide a rebuttal to Ackman’s accusations. The plot will thicken.

Bill Ackman is likely to have his own rebuttal to the rebuttal, if recent comments are anything to go by. Ackman is digging in for a prolonged fight, the real question is, are the investors going against him willing to do the same?