The short-seller Robert Chapman and hedge-fund billionaire Bill Ackman are facing off again over a stock.
Chapman told CNBC's Scott Wapner he shorted ADP shares, a bearish bet. The founder of Chapman Capital didn't disclose the size of the trade, at an average cost of $119.50, but it sets him up opposite Bill Ackman's Pershing Square, which recently bought an 8 percent stake in ADP and nominated three directors to the company's board.
During a scheduled conference call for the public on Thursday, Pershing Square revealed its "transformation plan" for ADP, saying the stock could more than double in four years based on its research. The payroll processor's stock fell 5 percent as of midday Thursday, to $106.01.
Pershing Square's work "shows a focus on quantity over quality of research," Chapman said on CNBC's "Halftime Report" Thursday.
"Where are we in the employment cycle?" he asked. "The payroll numbers have been expanding for 7 or 8 years ... The competition is fierce now."
Chapman admitted he enjoys being on the opposite side of Ackman on a trade.
"Making a dollar being short an Ackman stock feels as good as making $10 on one that he is not long," he joked.
Shorting is a trading strategy that involves selling borrowed shares with a view the stock will drop in value and the shares can be bought back later and returned for a profit.
Chapman famously criticized Ackman on CNBC over his Herbalife short four years ago, when he owned the company's shares. He presciently predicted Ackman would have a difficult time exiting his bearish Herbalife position.
"I truly believe he's a guy who probably has a poster from the movie '300' hanging over his bed," Chapman said on July 31, 2013, referring to a dramatization of an ancient Greek battle. "He's not trained in the fine art of surrender, and when he's putting his investors' financial lives at risk, I think he's just going to keep going forward."
On a separate conference call on Wednesday, Ackman said Pershing Square was still short Herbalife.
Shares of Herbalife are down 3.6 percent from July 31, 2013, to Aug. 16, 2017, compared to the S&P 500's 46.4 percent gain in the same time period.
A spokesman for ADP did not immediately respond to a request for comment on Chapman's bearish position in the company.