Herbalife Ltd. (NYSE:HLF) halted trading to reveal that the Federal Trade Commission was launching an investigation into its business practices. That sent shares into a downward spiral, as they declined by as much as 9% in the wake of that announcement.

Bill Ackman herbalife

Activist investor Bill Ackman is probably smiling right about now, although his firm Pershing Square Capital Management declined to comment on the FTC investigation.

Bill Ackman’s bet starts to turn around

Ackman famously announced he had a $1 billion short position in Herbalife Ltd. (NYSE:HLF) in late 2012. Since then, he has been trying to discredit the company, calling it a pyramid scheme and targeting some of those who are connected with it. This week he gave another presentation, this time focusing on the company’s China operations and showing how he believes the company operates outside Chinese regulations governing direct sales. He remains convinced that regulators will investigate and shut Herbalife down as a pyramid scheme.

Business Insider reports that with today’s decline in Herbalife Ltd. (NYSE:HLF)’s share price, Ackman has now earned back about $72 million on his bet against the company. Of course estimates have been changing over the last year or so, but the most recent estimate suggested he lost about $500 million on paper. So he’s still got a ways to go before he breaks even on his short bet.

Ackman did reposition his firm’s short position on Herbalife Ltd. (NYSE:HLF) in October. He had been shorting approximately 20 million of the company’s shares, but then he swapped about 40% of his position for put options. According to Business Insider’s estimates, that means he still has about 12 million shares of Herbalife shorted. With today’s decline, that’s about a $72 million paper profit on that short. However, some of that turnaround could be erased as shares continue to ping pong on news of the FTC investigation.

Other MLM stocks affected by Herbalife news

Herbalife Ltd. (NYSE:HLF) shares aren’t the only ones affected by today’s news. Shares of competing multi-level marketing company Nu Skin Enterprises, Inc. (NYSE:NUS) were halted shortly after Herbalife’s shares because of extreme volatility. Shares of Nu Skin rose as much as 5% after the FTC probe was announced, as investors may be thinking Nu Skin will benefit from Herbalife’s problem.

Shares of USANA Health Sciences, Inc. (NYSE:USNA), another multi-level marketing company which sells nutritional supplements, declined as much as 6% after the probe was announced.