Activist investor Bill Ackman told CNBC on Wednesday that his losses from betting against Herbalife have been "more than cut in half" based on the recent downturn of the nutritional supplement company's stock.
"This is unfortunately a very bad company, causing a lot of harm," Ackman said in a "Squawk Box" interview.
Ackman's $13 billion Pershing Square Capital Management first shorted Herbalife on May 1, 2012.
When he announced it publicly in December of that year, the hedge fund manager called the health company a pyramid scheme and said his position was worth $1 billion.
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Pershing Square—which restructured its position using options—took a beating as Herbalife stock increased more than 165 percent in 2013 with rivals Carl Icahn and Dan Loeb taking the other side of the trade.
So far this year, shares of Herbalife have fallen more than 25 percent—as an alphabet-soup of Washington agencies and at least two state attorneys general are investigating the company.
"Our goal was to shine a spotlight on the situation" at Herbalife, Ackman said on CNBC.
Read MoreAckman promised Herbalife whistleblower $3.6M: ABC
Last week, Herbalife was hit with a shareholder class action lawsuit that accused the company of failing to disclose to investors that its operations were based on a pyramid scheme.
Herbalife has steadfastly defended its business model and denied Ackman's accusations.
Botox, transparency, high frequency trading
In his "Squawk Box" appearance, Ackman also touted his partnership with Valeant Pharmaceuticals to try to buy Botox-maker Allergan for $46 billion.
Read MoreI did not front-run Allergan stock, Ackman says
The Pershing boss and Valeant's Chairman and CEO J. Michael Pearson held court on their arrangement at an investors meeting in New York City on Tuesday that lasted nearly four hours.
"That kind of transparency is very healthy for investors," Ackman told CNBC on Wednesday. "By the way, it's not just for institutions. That was open to the general public. You can download on the Web and watch it."
Ackman cited the acquisition of his 9.7 percent stake in Allergan as an example of how high-frequency traders can get out in front of large buyers.
"If you look at our investment in Allergan ... over the last six days, that [was] sending constant signals to all the high-frequency traders," he said.
"The high-frequency traders would buy a share in front of us and then sell to us. Buy a share in front of us and [sell it to us]," he explained.
"I think Michael Lewis is right," said Ackman—referring to accusations made by Lewis in his new book "Flash Boys" that the stock market is rigged and high-frequency traders exploit the system.
Read More Michael Lewis: Rigged markets an 'accidental conspiracy'
—By CNBC's Matthew J. Belvedere and Maneet Ahuja.