Mad Money

Herbalife—The One Question That Matters

No Huddle Offense: Herbalife's Next Move

It seems people just can't get enough of Herbalife and the controversy surrounding this stock.

On Friday the company was at the center of a spirited exchange between top hedge fund manager Bill Ackman and billionaire investor Carl Icahn.

The two Wall Street titans locked horns over the future prospects of the company.

Ackman is short the stock, a bet the stock will go lower; he's been very public in his belief that Herbalife is a pyramid scheme — an allegation the company strongly denies.

(Read More: Herbalife's President Calls Ackman's Claims a 'Gross Distortion of Reality')

Icahn is thought to be long the stock — or own it — presumably as a bet the stock goes higher.

Herbalife 24
Tiffany Rose | WireImage | Getty Images

"Everywhere I went this weekend people were buzzing about the mesmerizing television that was Carl Icahn vs. Bill Ackman on the 'Fast Money Halftime Report,'" said Jim Cramer. "People hit me up on the street, at bars, and at dinner wanting to know who I thought won."

It seems people are chock full of questions — such as, why were the two men so hostile? Or does Icahn actually own the stock?

Although it's fun to speculate about these things, Cramer said if you're an investor, there's really only one question that matters.

What will it take for either man to be right? In other words, what will it take for Herbalife to go to zero or to go to the theoretical point of infinity?"

According to Cramer here's what matters.

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"Ackman, with his now well-publicized thesis, has not succeeded in knocking down the stock. My presumption is that without an indictment for fraud, not just an investigation, but an actual indictment, Herbalife will not go to zero on its own merits," Cramer said.

In other words, the charges alone probably won't be enough to generate additional declines — and that presents a challenge for Bill Ackman's investment thesis.

"The charge of a pyramid scheme just hasn't created a mass exodus in the stock. And the preannouncement of a good quarter suggests the business remains in tact," Cramer explained.

However, Herbalife remains a battleground stock — and as long as that's the case, Cramer can't recommend owning the stock. Even if you're a pro, and intrigued by the chance of a short squeeze, Cramer said move on.

There are just better places to put money to work.

Call Cramer: 1-800-743-CNBC

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