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Icahn Buys 14 Million Shares of Herbalife for 12.98% Stake

Carl Icahn bought 14 million shares of Herbalife, giving him a 12.98 percent stake in the nutritional supplement marketer, according to a 13D filing.

This disclosure comes just a few weeks after the billionaire had an epic argument on CNBC with Pershing Square Capital Management's Bill Ackman over Herbalife. Ackman is short the stock, calling it "a pyramid scheme."

Icahn said he's done a great deal of research on Herbalife and that he doesn't make investments like this lightly in an interview on CNBC's "Fast Money." Still, he didn't let the Ackman feud go, saying that Ackman is off base in what he's been saying.

(Read more: Icahn, Ackman in Epic Showdown of Billionaires)

The filing, which said Icahn wants to explore strategic options with management, finally puts a number on what Icahn owns. It also sharpens the battle lines between Ackman and fellow hedge fund industry heavyweight Daniel Loeb. Ackman argues that the company is a house of cards and its stock should drop to zero, while Loeb sees room for Herbalife shares to climb to $68. The shares closed on Thursday at $38.27.

Herbalife shares jumped more than 20 percent in after-hours trading. What's the stock doing now? Click here for the latest after-hours quote.

Icahn has now replaced Loeb, who told investors in January that he had bought an 8-percent stake in Herbalife, as the most prominent rival to the short position Ackman has taken.

Loeb and Icahn are keeping company with two managers who were mentored by industry legend Julian Robertson, plus a fund started by mutual fund powerhouse Fidelity Investments, new regulatory filings show.

Those managers might have gotten in at a low price and made money as the stock moved higher again in January.

Phillipe Laffont, who founded Coatue Management after working for Robertson's Tiger Management, owned 850,000 shares at the end of December, according to a filing made with the Securities and Exchange Commission on Thursday.

Similarly Patrick McCormack, another so-called Tiger Cub, reported that his Tiger Consumer Management nearly doubled its exposure to 2.3 million shares at the end of December. In the third quarter, it owned 1.4 million shares, which ranked it among Herbalife's 20 largest investors.

Geode Capital, which was started by Fidelity, upped its holding in Herbalife slightly.

Loeb's regulatory filing for the fourth quarter showed that he owned roughly 3 million shares of Herbalife at the end of December, signaling that he kept buying the stock in early January before announcing that he owned 8.9 million shares.

By January 3, Loeb was Herbalife's second-biggest investor after Fidelity Management & Research.

Some of the newcomers may have been tempted to enter the fray precisely because Ackman helped drive the price down dramatically in December, when he said he was shorting the company. Icahn did not list the company as one of his holdings at the end of December.

Shares of Herbalife, which plunged 40 percent after Ackman's presentation, surged 76 percent during the height of a short squeeze, which took place approximately from December 24 to January 15, when some of these hedge fund managers may have come in.

Einhorn Bets on Apple

Meanwhile, big hedge funds were divided on what to do with their shares of Apple in the fourth quarter with a number of funds completely closing out their positions while others increased their bets on the tech giant.

David Einhorn, who is pressuring Apple to return more of its $137 billion cash pile to shareholders, disclosed in a filing with the Securities and Exchange Commission Thursday that his Greenlight Capital increased its stake in the iPhone maker by 45 percent to 1.6 million shares in the fourth quarter.

(Read More: Apple? Einhorn Just Doesn't Get It: Cramer)

David Tepper's Appaloosa was also buying shares of Apple during the quarter, according to a filing.

But while Greenlight and Appaloosa were buying, hedge funds like Dan Loeb's Third Point, Eric Mindich's Eton Park Capital, Thomas Steyer's Farallon Capital and Barry Rosenstein's Jana Partners completely unloaded their stakes in the iPhone maker.

(Read More: Cooperman Sells Apple Stake, Buys Facebook)

Others including Julian Robertson's Tiger Management trimmed their Apple holdings.

Both Einhorn and Tepper also increased their stakes in Microsoft.

In healthcare, Greenlight closed out of its Humana and WellPoint holdings but increased its stakes in Cigna and Aetna. Loeb, meanwhile, exited its positions in WellPoint, UnitedHealth Group and Cigna.

'In other moves, Paulson & Co. took a 127.7 million share stake in Sprint Nextel. John Paulson continued to bet on gold, holding 21.8 million shares in the exchange-traded fund SPDR Gold Trust.

Large hedge funds are required to disclose their U.S. stock holdings within 45 days after the end of each quarter. But the filings do not need to include bonds, foreign stocks and derivatives. Short positions are not listed either.

Buffett Hikes His Stake in GM

Warren Buffett's Berkshire Hathaway increased its bet on General Motors, increasing its holdings by 67 percent in the final three months of last year.

Berkshire also reported a 4-percent increase in its Wells Fargo stake, making that its largest holding in dollar terms. Berkshire's total stake in Wells Fargo was $15.5 billion as of Thursday's close, trumping the firm's stake in Coca-Cola, which was worth $14.7 billion.

(Read More: Click Here for the Latest Updates on Buffett's Holdings)

Reuters contributed to this report.

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