UPDATE 2-Fund titans Loeb, Ackman square off on Herbalife
* Loeb accumulates 8.2 pct stake
* Two titans have conflicting visions on company's future
* Industry braces for high-profile public brawl
* Herbalife shares up nearly 6 pct on Loeb's move
(Adds details on Loeb and Ackman, company background, updates share price)
Jan 9 (Reuters) - The fight over nutritional supplements company Herbalife Ltd gained intensity and drama on Wednesday as hedge fund titans Daniel Loeb and William Ackman now appear to be squaring off.
Simply put, Loeb is betting Herbalife will flourish while Ackman is betting it will falter.
Loeb, fresh off a stellar 2012, gave the supplements company a shot in the arm on Wednesday, when his Third Point LLC hedge fund said it has taken a stake of more than 8 percent in Herbalife.
Herbalife shares rose sharply on the news.
The move comes less than a month after Ackman's Pershing Square Capital Management called Herbalife's business model a "pyramid scheme" and disclosed a short position valued at around $1 billion, betting that the share price will fall.
Ackman says Herbalife's business model is flawed because it depends too heavily on recruiting new distributors rather than selling products to customers. Herbalife has vehemently disputed Ackman's accusations.
Loeb and Ackman are sometime-friends, each with reputations for conducting strong research and delivering sharp-tongued bluster. As they now face off, investors and industry observers are bracing for a high-profile and public brawl.
"This will be a battle of firepower," said David Tawil, who runs hedge fund Maglan Capital.
Herbalife shares jumped as much as 8.9 percent on Wednesday on news of Loeb's move. The shares were still up 5.6 percent at $40.49 in late morning.
Ackman's announcement of his short position last month, which included a 340-page presentation of his criticisms, pushed the share price down 21 percent.
Loeb has company in betting that Herbalife, a mainstay in many investment firms' index funds, will rise further. East Side Capital, a highly respected New York-based hedge fund which has long managed money for George Soros, is one of the biggest investors in Herbalife, regulatory filings show.
Robert Chapman, who founded Chapman Capital, said last week in a blog post that he took a "monster" bet on Herbalife shares climbing, arguing that Ackman's quest to see Herbalife's stock price go to zero depends heavily on the Federal Trade Commission's becoming involved in the matter.
But Ackman is not alone, either. A person familiar with hedge fund Kynikos Associates said short seller Jim Chanos is believed to have been shorting Herbalife shares for a while.
(Reporting by Svea Herbst-Bayliss in Boston, additional reporting by Ben Berkowitz; editing by John Wallace and Matthew Lewis)