Wall Street

How the Icahn-Ackman 'Battle of the Billionaires' on CNBC became a defining moment of the decade

Missed the Big Fight? Watch It Now
Missed the Big Fight? Watch It Now

As we get ready to say goodbye to the 2010s, CNBC.com is taking a look back at the key players, events and transformations from Wall Street to Silicon Valley to corporate America to the White House that shaped a "Decade of Disruption." In the lead-up to New Year's Day 2020, CNBC's online journalists will be exploring the moments that defined the past 10 years for your money and set the table for the next decade and beyond.

The public and oftentimes nasty wars waged by activist investors this decade are personified by the 2013 "Battle of the Billionaires" on CNBC.

The live, on-air brawl nearly seven years ago featured Carl Icahn and Bill Ackman. The epic fight over their opposing views on global nutritional supplements company Herbalife played out on "Fast Money Halftime Report" with CNBC's Scott Wapner from the New York Stock Exchange.

They scorched the phone lines with insults and accusations for nearly a half-hour to the "oohs" and "aahs" of traders from the floor of the NYSE. It would have been hard to believe at the time — but about 18 months later, they'd hug it out at CNBC's premier investor conference.

Who are these billionaires?

Long before they squared off on CNBC, Icahn, 83, and Ackman, 30 years his junior, made their bones on Wall Street in very different times. But they both are still actively investing.

Icahn still runs his eponymous company, Icahn Enterprises, more than 30 years after his 1985 takeover of Trans World Airlines. In November, Icahn said he bought a 4.24% stake in printer and PC maker HP Inc., and supports a merger with Xerox. He also owns a 10.6% in the copier company.

Ackman burst on the investment scene in the early 2000s as a 30-something who saw success with activist positions in Wendy's, mall operator General Growth Properties and Canadian Pacific Railway. On Monday, Ackman's Pershing Square Capital Management revealed a position in Agilent Technologies.

Icahn vs. Ackman over Herbalife

The hedge fund billionaires in January 2013 found themselves in a bitter feud stemming from Ackman's $1 billion bet against Herbalife stock. The back-and-forth came to a head on live television.

The brawl began with Ackman, in a phone interview on "Fast Money Halftime Report," defending himself against attacks from Icahn over publicizing the short the month before and agreeing to have Icahn call into the show.

"He's the quintessential example that on Wall Street, if you want a friend, get a dog."
Carl Icahn
Icahn Enterprises
"This is not a guy who keeps his word. This is a guy who takes advantage of little people."
Bill Ackman
Pershing Square Capital Management

Once on the line, Icahn called Ackman a "liar" early on, accusing his rival of having "one of the worst reputations on Wall Street." Icahn later said to Ackman, "I wouldn't invest with you if you were the last man on Earth."

Ackman countered by saying, "Icahn unfortunately does not have a good reputation for being a handshake guy."

Icahn said that Ackman is the "quintessential example that on Wall Street, if you want a friend, get a dog."

Ackman blasted Icahn: "This is not a guy who keeps his word. This is a guy who takes advantage of little people."

About a month after the battle, Icahn revealed in a filing a huge stake in Herbalife, effectively taking the other side of the short, which Ackman defended for months, saying the stock would go to zero and accusing the multilevel marketing company of being a "pyramid scheme." Herbalife frequently and repeatedly denied those charges.

The hug heard 'round the world

Icahn, Ackman, together again
Icahn, Ackman, together again

Icahn and Ackman would remain entrenched on either side of the Herbalife trade for years — but in a surprise joint appearance at the CNBC-Institutional Investor "Delivering Alpha" conference in July 2014, they made up and hugged each other.

Fast-forward nearly four years, Icahn told CNBC in March 2018 that he made a billion dollars from his investment in Herbalife. He said at the time that his relationship with Ackman was still friendly. A month earlier, Ackman had told CNBC that he exited his losing bearish bet against Herbalife.

Looking at Herbalife since Ackman's short was first revealed about seven years ago, the stock has basically doubled.

The shares were trading around $21 each on Dec. 19, 2012, when CNBC broke the news about Ackman's bet, which he would detail a day later at the Sohn Conference in New York City.

The stock traded down in the teens in the aftermath of Ackman's short before recovering to around $40 a year later. The stock would retest those 2012 lows in 2015.

The stock hit all-time highs around $60 at the beginning of this year. It's down about 23% for 2019 compared with the S&P 500's 26% advance over the same period. Herbalife closed Thursday at about $46 per share.