Ackman Cuts Herbalife Short

Oct 3 2013 | 3:25am ET

Sitting on a paper loss of $500 million on its $1 billion short bet against Herbalife, Pershing Square Capital Management is cutting back on its risk.

The hedge fund told clients yesterday that it had reduced the size of its short against the nutritional supplements company by 40%, replacing it with long-term put options. The move leaves Pershing Square poised to reap the full reward of a Herbalife failure while protecting it against further losses if the stock, which has more than doubled this year, continues to rise.


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