Jim Chanos Says He Was Short Herbalife And That Ackman Is 'Correct In His Analysis'

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Famed short-seller Jim Chanos, the founder of Kynikos Associates, said on CNBC's "Squawk Box" this morning that he shorted Herbalife last year.

"We were short last year," Chanos said, adding, "We were short at a price."

He currently has no position in Herbalife, which is a multi-level marketing firm that sells nutrition products.

He explained that he's "not crazy" for this multi-level marketing model. He's said that before.

He also added that he thinks Bill Ackman is "correct in his analysis in that when your business is based, in effect, on selling an overpriced commodity to your customers or you distributors you ultimately have a flawed business down the road."

He said he covered his short because the stock almost got cut in half in November of last year.

Herbalife has become one of the most controversial stocks lately. Ackman, the CEO of Pershing Square, publicly declared that he's shorting more than 20 million shares of Herbalife because he believes it's a "pyramid scheme."

Not everyone agrees with Ackman, though. A number of hedge fund hot-shots, including Daniel Loeb, the founder of Third Point LLC, and Ackman's long-time rival Carl Icahn have snapped up big stakes in Herbalife.

Shares of Herbalife were down slightly in pre-market trading.

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