Activist investor, Carl Icahn and his associates confirmed to other investors that he acquired a “small” stake in Herbalife Ltd. (NYSE:HLF), after Bill Ackman, CEO of Pershing Square Capital Management, revealed that he shorted 20 million shares of the company and alleged that it is a pyramid scheme.

Carl Icahn

Last week, ValueWalk  reported that Icahn initiated a long position in Herbalife after a source  confirmed the report from Michelle Celarier of the New York Post.  At the time, the size of the position was unclear.

The Wall Street Journal reported that one of the investors who spoke with Icahn said an  associate of the activist investor met with the management team of Herbalife Ltd. (NYSE:HLF). Icahn is a veteran investor who buys shares of problematic companies and demands for some change to  increase the value of shareholders. If the board of a company refuses to accept or implement his recommendation, he will launch a proxy fight.

Icahn’s move to join the bandwagon of investors who believe Ackman is wrong in his bet against Herbalife Ltd. (NYSE:HLF) spices up the ongoing debate about the company. This time the question is not only about whether Herbalife is a pyramid scheme or not. It is also about who will emerge as winners and losers in their investments, in the company.

Hedge fund manager, David Tepper of Appaloosa Management, who has no position in Herbalife Ltd. (NYSE:HLF) commented, “It’s interesting to watch from afar.”

The debate regarding Herbalife became more engrossing with Icahn’s entry betting against Ackman because both investors had a dispute in the past. Ackman and Icahn spent years fighting in court over their agreement for profits from shares in a real estate company. Ackman won the case, and his relationship with Icahn remains sour. In one of his speeches, Ackman commented that he has “no respect” for those activist investors who stir up large-cap companies for change. In response to Ackman, Icahn said he considered the criticism a compliment.

Prior to report that Icahn acquired a stake in Herbalife, Daniel Loeb, hedge fund manager of Third Point revealed that he bought 8.2 percent stake in the company. He also sent a letter to his investors and labelled Ackman’s accusations against Herbalife “preposterous.”

Ackman is planning to launch a counter attack against Herbalife later this month or early in February. Meanwhile, The Securities and Exchange Commission (SEC) launched an investigation on the company.