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The information you're missing is the timeline:

1. Ackman shorted Herbalmagic.

2. Ackman lobbied against herbalmagic.

3. Lobbying failed, and Ackman has now accumulated 500 millions in paper loss.

4. Ackman announces that he will give any profit to charity.

Pretty easy to give away non-existing profit. (Also, his donation would obviously not include any profit his firm and clients would make off the bet.)



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