In the ongoing battle of Bill Ackman against Herbalife Ltd. (NYSE: HLF), it appears that Herbalife has struck a decisive blow. The lawsuit claimed that shareholders lost money because Herbalife portrayed itself as a legitimate company when really it was a “pyramid scheme,” or Ackman’s favorite term, “criminal enterprise.”

The decision was handed down in a district court in Los Angeles. The presiding judge determined that not enough evidence was presented by shareholders to prove that Herbalife had inflated its stock price by misrepresenting itself.

Ackman has been fighting Herbalife for more than two years now. Unlike most activists who might try to take over a company or influence its decisions, Ackman has taken a short position and wants to ride it all the way to zero.

Herbalife did come under observation in a probe by the Federal Trade Commission just a year ago, and the company may be exonerated in that probe, according to Bloomberg. However, this same probe came after Ackman accused Herbalife of misleading distributors, misrepresenting sales figures and selling a commodity product at inflated prices.

There was a rally in last Friday’s trading session that likely was due to the news that the government is looking into whether the market or stock was manipulated. Depending on that outcome, this could prove costly to Ackman in more ways than one.

Earlier this month, one analyst firm suggested that Herbalife fundamentals were feeling the weight of changes to the marketing plan, and as a result it lowered its price target.

Canaccord Genuity maintained its Buy rating for Herbalife but lowered its price target to $42 from $50, noting that the company is starting to feel like a value trap.

Shares of Herbalife jumped at the dismissal, up nearly 12% to $38.70 Wednesday morning. The stock has a consensus analyst price target of $57.80 and a 52-week trading range of $27.60 to $69.69.

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