Long-time Herbalife Ltd. (HLF) bull and Pivotal Research analyst Tim Ramey squared off with activist investor Bill Ackman virtually through a report in which he posed the questions he would have asked if he were on CNBC when the TV network interviewed him. CNBC’s Scott Wapner spent an hour interviewing Ackman, mostly on Valeant Pharmaceuticals, although about ten minutes were spent on Herbalife.

Herbalife Ltd. (HLF): Tim Ramey Trolls Bill Ackman And CNBC
Source: InsiderMonkey

How big is Ackman’s Herbalife short?

Ackman has been battling Herbalife for years now in his quest to bring down what he long claimed is a pyramid scheme, while Ramey has been in the opposite corner serving as the company’s cheerleader. Wapner’s first question to Ackman was about the size of his short position in Herbalife, which was $1 billion at the beginning of his “quest” in late 2012. Ackman said the size of that position hasn’t changed, but when pressed further, he added, “plus or minus.”

Ramey wants to know how much Ackman’s realized losses have been on the short, however, and he stated that the billionaire covered a good chunk of his short in September 2013 after booking some losses. Further, he claimed that “significant quantities of puts have expired worthless” and suggested that break-even may be in the low $20 per share range.

“With realized losses of let’s say $1 billion, we bet the mark-to-market loss to date on HLF is in the $1.5 billion range,” the Pivotal analyst added. “That would have been an interesting follow-on. Ackman has flat out been wrong on HLF.”

HLF in a better position?

In response to Herbalife’s statement to CNBC, Ackman told Wapner that the company isn’t in a better place now than it was before, even though management said they are, and added that the company has even “deteriorated dramatically.” Ramey argues though that the company has posted real volume growth over the last three years and that estimates are lower because of currency headwinds, which have impacted every U.S.-based company with international sales.

Wapner went on to imply that Ackman had made “arbitrary claims” about Herbalife, but Ramey of course disagrees. For example, he notes that the activist investor said Herbalife couldn’t get an auditor in 2013 and that it couldn’t get a clean audit opinion—both points he was wrong on, in addition to others. Of course the word “arbitrary” means that the statements were made based on whim rather than any particular reason, but seeing as how Ackman manages billions of dollars, he probably had a reason for his expectations, whether or not any of them turned out to be correct.

Ramey also points out that the Pershing Square chief no longer seems to be pushing the pyramid scheme thesis, which was his original claim against Herbalife.

FTC decision near

The analyst does agree with Ackman in believing that a decision from the Federal Trade Commission is expected to be soon, although he thinks Herbalife will “emerge unscathed” from the investigation even though it might be fined for old videos containing statements by some distributors that were posted on YouTube. Ramey still doesn’t have much to say about other pending investigations involving the company.

Ramey called Herbalife “a compelling BUY” as his price target is $90 per share, suggesting significant upside from the current share price. The stock climbed 0.61% to $57.70 per share during regular trading hours on Wednesday. Herbalife is due to release its next earnings report on Thursday after closing bell.