Somehow, Everybody Came Out a Winner in the Herbalife Battle Royale

Adam Clark Estes

Remember a couple of months ago, when hedge fund giant Carl Icahn went nuclear on hedge fund giant Bill Ackman for short-selling Herbalife stock? Turns out the spat might've made both men millions. On Sunday night, The Wall Street Journal reported that Icahn is up $25 million on his $590 million investment in Herbalife, while Ackerman made $200 billion on an investment of over $1 billion.

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It's hard to peg the gains on a single event. Herbalife itself has been quite the success story having become an $8 billion supplement empire in just over three decades. Folks like Icahn also think that it's a pyramid scheme that destroys people's lives and accused the company of fudging its numbers. Icahn's very public trashing of Herbalife came to a climax at the end of January when the he and Ackman went head-to-head for a full hour on CNBC using such grownup, tough guy words as "crybaby,"  "liar," "loser," and "bullshit." The aftermath of the televised word fight kept Herbalife in the news in the weeks that followed and, eventually, Icahn was compelled to admit that he had indeed invested in Herbalife, despite the hate. The stock price skyrocketed

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So now everybody looks sort of sleazy. If you do believe Herbalife is a pyramid scheme that's exploiting the complexes Middle Americans have with their bodies, Ackman looks the villain for investing a ten-figure sum and making the company the money-sucking behemoth it is today. On the other side of the coin, Icahn hardly looks like a prince for building negative buzz around Herbalife, all the while raising the company's profile and sending cash into his own pocket. Very sly, Carl. There's even a third character: Daniel Loeb of his own hedge fund, Third Point. Loeb's sided with Icahn and although he couldn't be seen swinging at Ackman on CNBC, he did sit back and watch his $200 million investment earn him $50 million. 

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As with all investments, it's never time to declare victory until you cash out. All three of the men still have the capital tied up in Herbalife stock. As one analyst pointed out to The Journal, "It's one thing to have a paper profit, it's another thing to actually realize the profits."