Billionaire hedge-fund manager Bill Ackman  has reduced his equity short stake in Herbalife,  taking a loss even as he reiterated his allegation that the company is an illegal pyramid scheme.

In a letter to Pershing Square Capital Management LP’s investors, Ackman said he replaced a portion of his original short position, that was valued at about $1.5 billion, with long-term put options. The move lets Pershing still make money if the company fails “within a reasonable time frame” even as it reached an all-time high last month.   Herbalife Pyramid