Bill Ackman Called Herbalife "The Best-Managed Pyramid Scheme in History" and Bet $1 Billion It Would Go to Zero. He Lost $1 Billion. Carl Icahn Made $1 Billion.

In December 2012, Bill Ackman strode into a conference room and delivered what he called "the most important presentation" of his career—a 300+ slide demolition of Herbalife that lasted over three hours. He unveiled a $1 billion short position and compared the company to, among other things, the Nazis.

The stock dropped 20% in three days. Victory seemed inevitable.

Then Carl Icahn entered the chat.

Icahn, smelling blood (and opportunity), took the opposite side of Ackman's trade. The two billionaires had a legendary on-air brawl on CNBC in January 2013, where Icahn called Ackman a "liar" and a "crybaby," while Ackman accused Icahn of taking advantage of "little people." It was the financial equivalent of two drunk uncles at Thanksgiving.

Icahn built a 26% stake in Herbalife. The stock rallied. And rallied. And kept rallying.

For five agonizing years, Ackman maintained his crusade. He funded a documentary ("Betting on Zero"), lobbied regulators, gave more presentations. The FTC did investigate and fined Herbalife $200 million—but declined to call it a pyramid scheme. The stock soared.

By February 2018, Ackman finally surrendered. He exited his position, having lost close to $1 billion.

Carl Icahn? He made approximately $1 billion in profit.

Herbalife, which Ackman said would go to zero, is still trading today at around $19. The company Ackman called the "best-managed pyramid scheme in history" outlasted his bet against it. Sometimes the pyramid wins.