HEDGE FUND WAR: Dan Loeb Buys Stake In Herbalife, Causes Stock To Soar, Hurting Bill Ackman's Big Short

A huge hedge fund war is breaking out between two of the richest and most famous hedge fund managers in the world.

The battlefield? Herbalife, the distributor of its own nutritional products.

Hedge funder Bill Ackman is famously short Herbalife, likening it to an illegal pyramid scheme, which he hopes/expects the government will go after.

Today it's been revealed that hedge funder Dan Loeb has now gone LONG Herbalife, taking a massive 8.2% stake.

The stock has spiked on the news.

Ackman first announced his short with a dizzying multi-hour presentation that he delivered near the end of December.

The premise of the short was that the stock was a pyramid scheme, and that the government could be induced to investigate the company, causing it to go to zero.

Ackman's short is understood to be massive.

While Herbalife plunged initially, the stock has recovered somewhat, as some have questioned the plausibility of the bet.

Among those already betting against Ackman is blogger John Hempton, who thinks his thesis is preposterous.

Click here to see the full presentation >