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How Herbalife’s share buyback could force Bill Ackman to trim his short position

Will Herbalife Ltd.’s planned $600 million share buyback be the lever that forces hedge-fund manager Bill Ackman out of part of his roughly $1 billion short position in the stock?

It might be, according to S3 Partners LLC, which has access to and tracks short-interest data in real time. It will certainly make life uncomfortable for the noted activist investor, who has campaigned vigorously for years to persuade the investment community that the nutrition-products distributor is operating a pyramid scheme.

S3 estimates that Ackman has not made much effort to cover his short position in the stock. Short sellers take a view on a stock that it will fall in price.

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