The company responded by saying Ackman's presentation was riddled with numerous "misstatements and mistakes" and complained its executives were denied access to the event.

Investors surveying the battle, now in its second day, sent Herbalife shares down 9.64 percent to $33.74 by the close of trading on Thursday, adding to Wednesday's 12 percent fall for a combined two-day loss of more than 21 percent.

Thursday's presentation came a day after Ackman confirmed that his $11 billion Pershing Square Capital Management is betting against the company. Known for agitating for management change at companies his fund invests in, Ackman has targeted Herbalife via one of his biggest short positions in years.

The hedge fund manager outlined his case for shorting the shares in a lengthy presentation entitled "How to be a millionaire," that featured more than 300 slides questioning how Herbalife generates sales and the pricing models for its products.

Speaking before a crowd of more than 500 at an event sponsored by a charitable group, Ackman said he is so sure of his position that he believes the company's stock price will eventually go to zero. He promised to continue the assault by putting up a website to continue his critique that Herbalife has grown remarkably rapidly without demonstrating "much substance" to justify its growth.

"We have an enormous short position and we believe we are right," Ackman said.

Herbalife responded by saying there were many misstatements and mistakes in Ackman's presentation. "Had our executives been there, they would have been able to tear Mr. Ackman's premises and interpretation of our business model apart," Herbalife's statement said.

Not everyone is convinced that Herbalife is on a permanent downward spiral, with some of the country's biggest asset managers, such as BlackRock, State Street Global Advisors, and Vanguard, and pension funds like Teachers' Retirement System of Texas invested in the company.

"Herbalife has really never been more exciting than today (in both good and bad ways) and Mr. Ackman may have to wait another 32 years to see the growth at Herbalife decelerate," wrote Timothy Ramey, analyst at D.A. Davidson and Co., in a research report issued Thursday. He suggested buying Herbalife shares and predicts the company's stock price will rise to $72.

For his part, Ackman criticized the company for allegedly inflating the suggested retail price of its products and overstating its retail sales in public filings. Ackman also accused the company of targeting the poor and ill-informed to become distributors of its products.

"A pyramid scheme is actually a modern day version of a Ponzi scheme," Ackman said.

On Wednesday, Herbalife Chief Executive Michael Johnson said Ackman's pyramid scheme charge was "bogus," and he criticized Ackman for using a public attack on his company to benefit what he said was Ackman's "business model."

Ackman said he has been building his short position in the company's stock for several months, adding that his fund is only short the company's shares and not engaged in any options trading, such as buying put options on Herbalife.

A put option permits a trader to sell a stock at a specific price by a certain date. It is typically used by investors who have a negative view of a stock or investors seeking to hedge against a long position in shares.

Herbalife's Johnson said on Wednesday that "An extraordinary number of puts on our stock were due to expire this Friday. We previously learned this activity was pegged to some kind of 'significant event.'

"Mr. Ackman suddenly announces (Wednesday) that he will make a presentation on Herbalife on Thursday, the day before the puts expire," he added.

To date, Ackman is the first high-profile hedge fund manager to say he is shorting shares of Herbalife and has problems with its business model.

The company relies on sales of its weight management and nutrition supplements through a distribution channel involving 2.7 million sponsors in 81 countries.

The distributors make money based not only on their own product sales to consumers but on the sales of those they sponsor and bring into the business.

"I don't think very many retail sales are happening at all," Ackman said.

Earlier this year, it was believed that David Einhorn, another noted hedge fund manager, was shorting shares of Herbalife after during a company conference call he asked about the percentage of sales to consumers who are not official distributors.

Einhorn on Wednesday declined to comment about his position.

Another well-known investor believed to be shorting Herbalife is Jim Chanos, president and founder of Kynikos Associates, according to a person familiar with the hedge fund manager.

A person familiar with the thinking of some short sellers said multilevel marketing companies begin operating like a pyramid scheme when most of their sales are to other distributors of the product, as opposed to people who have no connection to the company.