Those who have read Michael Lewis' Boomerang are likely familiar with Kyle Bass. Not only did Bass -- the founder of Hayman Capital Management -- foresee and profit from the housing and credit crisis in 2008, but he also bet against the Eurozone's fiscal health prior to 2011.

Over the past year or so, Bass had accumulated a sizable holding of Herbalife Ltd. (HLF 2.09%) shares. The company has been in the crosshairs of some of finance's biggest names since famed investor Bill Ackman made it public knowledge that his Pershing Square Capital hedge fund was shorting the stock on claims that it was essentially a pyramid scheme.

Obviously, Bass disagreed. Before last quarter, Hayman Capital owned roughly 440,000 shares of Herbalife, worth about $34 million, and comprising about 7.5% of Hayman's overall holdings.

But then, something changed. When Hayman reported its stock positions last week, it was revealed that it had sold off all of its Herbalife shares by Dec. 31, 2013.

Source: Herbalife.

What happened to change Bass' mind?
Well, for starters, it's worth acknowledging that Hayman probably made a tidy profit on Herbalife shares, as they were up more than 100% last year -- not including dividends reinvested. It could simply be that Bass originally saw a company whose shares were beaten up and had lots of upside. 

Indeed, when Bass was researching the company -- before buying it -- he called every state's regulatory agency and found just 233 total complaints. That's an amount, Bass says, less than that of most legitimate retailers.

He also said that given the "new-normal" levels of high unemployment, it would be quite attractive for youth -- especially abroad -- to join the Herbalife sales force to try to earn a living.

The real reason he likely sold
But the big catalyst Bass was waiting for as recently as Dec. 5, 2013, was the reissuing of the company's audited financial sheets over the past three years. He said that when they came out, the company would be able to buy back a massive amount of shares.

Well, that audit did come out. And even though the company said there were no "material" changes to its accounting, a review of the newly audited reports showed losses in shareholder equity and net income from what had previously been stated.

Though we can't know for sure what Bass' reasoning was, it's likely he didn't like Herbalife's results, or the fact that management tried to downplay the equity and income losses as nonmaterial. For investors who remain with the company, a careful consideration of management's transparency -- and the scrutiny the company has gotten from the government since Jan. 1 -- needs to remain in the forefront.

For now, Bass and Hayman have cast their vote on this battleground stock.