After the Federal Trade Commission on Friday reached a settlement with Herbalife - the multilevel marketing company - Ackman's hedge fund said the findings "constitute a pyramid scheme."
The FTC specifically didn't call Herbalife a pyramid scheme. But, as Pershing Square's spokesman also said on Friday, the FTC also didn't not call it a pyramid scheme.
And the FTC did ask Herbalife to make some changes to its marketing, and the way it rewards its members.
"While it appears that Herbalife negotiated away the words 'pyramid scheme' from the settlement agreement, the FTC's findings are clear," Pershing Square's statement added.
The activist investor has long framed Herbalife as a fraudulent company, placing a $1 billion short-sale bet against its stock and spending millions to convince others of its misdeeds. So Ackman had a lot to gain if the FTC had agreed to label Herbalife a pyramid scheme and shut it down.
Instead, he's losing money. Herbalife shares are up about 20% for the year, so far, with half that gain coming after news of the settlement.
But the hedge fund isn't losing hope on its bet, saying that Herbalife's settlement includes a business restructuring that "will cause the pyramid to collapse as top distributors and others take their downlines elsewhere or otherwise quit the business."
On that front, Ackman may have a point. After all - if the changes the FTC asked for are fundamental enough to Herbalife's success - this could cause it trouble.
Under the settlement, Herbalife must get rid of incentives that reward distributors primarily for recruiting, the FTC said. The new compensation structure would depend on whether participants sell Herbalife products, not on whether they buy.
Time will tell - not that this is much comfort for Pershing Square's investors. The hedge fund was down about 20% last year off losing bets, its worst year ever, with similar losses continuing through this year.