NEW YORK ( TheStreet) -- Billionaire activist and hedge-fund manager, Bill Ackman is known for his investment prowess. His credits include a successful MBIA ( MBI) short position during the heat of the financial crisis and a strategic long bet on General Growth Properties ( GGP) when many gave up the mall operator as dead.Creating returns for his Pershing Square hedge fund in 2013, however, has been difficult and may become much worse soon. After a highly public battle with J.C. Penney's ( JCP) management, Ackman threw in the towel and his Pershing Square hedge fund suffered a 50% loss on its investment. Were that the end of the story, it wouldn't be so noteworthy. After all, Pershing Square investors are about even for the year, despite enduring a loss of about 5% in the third quarter. What may become more troubling is Ackman's large short bet against Herbalife ( HLF), the multilevel marketing health-products company. Ackman believes Herbalife is an illegal pyramid scheme and the stock will go to zero as soon as everyone else figures out the business model is a fraud. Ackman presented an unusually long and detailed report why he believes Herbalife should be shut down, or at least be required to change of its business model by regulators. Ackman's contention appears unlikely considering the company has operated for over 30 years. If you're like me, your first thought was how did it survive for this long and grow into a $7 billion company without raising the ire of regulators who live for the chance to shut down a high-profile nationwide fraud. Chances are federal and states agencies have already examined Herbalife's business and decided the business passes muster. Without the force of regulators coming to save Ackman, it's clear Wall Street is no longer willing to. Ackman's short position was so large in relation to the tradable float that the position size was a catalyst of discussion of a possible short squeeze. In response, Ackman shifted some of his short position into long-dated out-of-the-money put options. Regardless of the amount of time until the expiration, all options expire which means the clock is working against him.