When a documentary film questioning Herbalife’s business practices hit the festival circuit last year, the global nutrition giant launched a swift, devastating counterattack.

The stakes, after all, were high. The film, Betting on Zero, asked if the company was a vast pyramid scheme that bilked hundreds of thousands of poor, vulnerable people in the US and across the world. The company maintains its direct sales model has been misunderstood.

Even before the film premiered at New York’s Tribeca film festival, a well-connected Democratic lobbyist tweeted that the film was funded by a Wall Street vulture who had staked a billion dollars on Herbalife’s demise.

A website mimicking the documentary, bettingonzero.com, funneled Google searches to a litany of damaging accusations against the film. Picketers at festival screenings handed out flyers that repeated the accusations.

Lobbyists bought half the tickets for a screening at the National Portrait Gallery and did not show up, leaving scores of empty seats.

If the goal was to snuff out the 99-minute film, it almost worked.

“It made it much harder for us to sell the film to distributors because they were worried Herbalife would litigate,” the director, Ted Braun, told the Guardian this week.

“We had been approached by several prominent distributors but all those deals fell away. Questions about the film’s financing cast a shadow over every discussion.”

Herbalife, which had net sales last year of $4.5bn, appeared to have learned from SeaWorld, which hemorrhaged revenue and public support after a critical documentary, Blackfish, found wide release.

Betting on Zero faced banishment to the fringe – a discredited, largely unwatched documentary.

Then John Oliver entered the fray. The host of HBO’s Last Week Tonight devoted almost the entire 6 November show last year to excoriating Herbalife, using clips from Betting on Zero. Oliver accused the company of having built an empire based on what he described as hollow promises that sellers of its protein shakes and dieting supplements could all become rich. The company always denied such allegations.

But the tide turned, Braun said. “The reception was tremendous. It tipped things over. It made the distributors feel confident there was a big market for this film.”

Betting on Zero had a theatrical release last month and started streaming on-demand over the weekend, debuting as the top documentary on iTunes.

But the story is far from over. The battle over the documentary echoes the wider, continuing fight over Herbalife, a titanic slugfest of egos and capitalism dubbed the hedge fund equivalent of Stalingrad. It features an eclectic cast including low-income Latino communities, Madeleine Albright and government regulators. Donald Trump may get to decide who prevails.

Braun is relieved to have found distribution but remains concerned that what he describes as corporate “dirty tricks” nearly sank the film. “That they would try to intimidate and quash the free exchange of ideas is a disturbing sign.”

Herbalife declined an interview request for this article but issued a brief statement: “As commentators have declared, Betting On Zero lacks any credibility because it was funded and developed by individuals who have more than a billion dollar interest in seeing both the direct selling industry as well as Herbalife Nutrition fail.”

The company’s view is detailed on the site which mimics the documentary’s title. It calls the film a “stalking horse” for hedge fund managers. “It really is an infomercial that is neither balanced nor grounded in the truth... The film is merely an attempt to manipulate the stock price of direct selling companies so investors can profit.”

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Herbalife’s rise was vertiginous and controversial.

An entrepreneur named Mark Hughes founded the company in 1980, selling protein shakes via multi-level marketing (MLM), a technique which encourages distributors to recruit other distributors by offering a share in their sales.

California authorities sued the company for making false claims about its products – the company settled, but accepted no guilt. By the time Hughes died in 2000 – the coroner said the cause was an accidental overdose – Herbalife was a global operation.

Michael Johnson, a former Disney executive, took over and oversaw meteoric expansion. In 2011 he reportedly earned $89m, making him the country’s highest-paid executive.

Then, in 2012, Bill Ackman, an activist investor, made an audacious intervention. He claimed Herbalife to be the best-managed pyramid scheme in history and accused it of ripping off 1.9 million salespeople around the world.

Ackman’s hedge fund, Pershing Square Capital Management, took a huge short position – a bet Herbalife’s share price would fall. “Our target price is zero,” Ackman said. “Because we think the business will fail.”

Herbalife’s stock price tumbled but then recovered, helped by bulk share purchases by Carl Icahn, a veteran investor who had a bitter, public feud with Ackman. Their battle transfixed Wall Street.

The US Federal Trade Commission (FTC) investigated and in July 2016 found that Herbalife had cheated salespeople. The company would have to restructure and “start operating legitimately”, said the regulator’s chairwoman, Edith Ramirez. Herbalife agreed to pay a $200m fine.

But the regulator stopped short of calling the company a pyramid scheme and did not shut it down, so many interpreted the ruling as an Herbalife victory. Its stock price is now higher than when Ackman made his bet five years ago.

The company’s future, however, is cloudy. Johnson is due soon to step down as CEO. It faces drastic restructuring. And it must satisfy an FTC monitor.

Braun, the documentary director, said he tried to show both sides of the battle and had numerous meetings with Herbalife executives, but in the end, they declined to participate. He used archive footage to convey Herbalife’s view. Ackman and Latino activists, in contrast, provided fly-on-the-wall access.

The campaign against the film began in the run-up to the Tribeca festival last year, when Hilary Rosen, a Democratic lobbyist, warned organisers the festival’s credibility was at stake and in a separate tweet said Ackman had “bought and paid” for the film. She did not immediately respond to a comment request for this article.

The site bettingonzero.com and the flyers distributed to festival-goers echoed her claim.

It was false, said Braun, and he had made that clear to Herbalife executives. But the allegation undermined his talks with potential distributors: “The merchants of doubt peddled their wares effectively.”

When John Fichthorn, co-founder of Dialectic Capital Management, revealed he was the film’s financier, Herbalife pointed out that he too had bet against Herbalife’s stock. Fichthorn said he had not done so since the film went into production and that the film-makers had independence.

In October, members of Heather Podesta + Partners, a lobbying firm headed by a prominent Democratic donor, reportedly bought 173 tickets for a screening at a Washington DC film festival and left the seats empty. The firm, since renamed Invariant, did not respond to a Guardian request for comment.

(Nor did Madeleine Albright, the former secretary of state. She has reportedly earned $10m as a brand ambassador who opens diplomatic doors for Herbalife.)

Oliver’s subsequent evisceration of Herbalife on HBO turned the tide and clinched distribution, said Braun, who previously directed a documentary about Darfur.

Last week, Twitter suspended an Herbalife-run account, @RealBillAckman, which had attacked the investor. Twitter did not immediately respond to a query asking why.

Two other Twitter accounts threatened to help US authorities to deport undocumented anti-Herbalife activists. There is no suggestion Herbalife had any connection to such tweets.

The campaign against the film did not reach the extremes of Scientologists, who are known to follow and harass critics, but it was still unsettling, Braun said. “This film was not intended to be an attack piece. It was intended to explore competing views. The intimidation was disturbing.”

If you Google Betting on Zero, the first result is still the ad for the attack site.

Herbalife’s fate remains unclear. Ackman has maintained his short position and Icahn, after an apparent wobble, remains dug in as an investor.

Much hinges on whether the company can transform its business model according to the FTC deal – and to what extent the FTC enforces it.

Of the regulator’s five board positions, three are vacant, including the chairperson, pending appointments by Trump.

Some analysts think Herbalife and other multilevel marketing companies will be able to breathe easy. The president plus the cabinet members Ben Carson and Betsy DeVos have connections to the industry.