Both men have a keen interest in Herbalife, a maker of dietary supplements designed to promote weight loss. Ackman claims the company is a fraud and has bet that its stock price will crumble; Icahn says it's a great buy.
They can't both be right, and for now it's not clear which one is. Icahn, for his part, disclosed in a regulatory filing late Thursday that he had accumulated a 13 percent stake in the company, essentially betting that Ackman is dead wrong. Icahn says he's not making his bet merely to spite Ackman.
"I'm doing this to make money, that's what I do," Icahn said in a telephone interview with CNBC Friday. "The fact that I don't like Ackman is, you could say, the strawberry on the ice cream."
Icahn was speaking on the same CNBC show on which he and Ackman had a shouting match three weeks ago over Herbalife and other topics that became the talk of Wall Street.
Herbalife's stock jumped $1.97 to $40.24 following the disclosure of Icahn's stake as investors bet that the financier might be right in his positive assessment of the company.
A surge in Herbalife stock would be disastrous for investors who have taken a "short" position in the company. Selling a stock short is a tactic in which an investor borrows shares in a company from a broker and then immediately sells them on the open market. The investor anticipates that the stock price will fall, allowing him or her to buy back the stock at a lower price in the future. The investor then returns the borrowed shares to the broker, pocketing the difference.
If stock rises instead, however, the investor will be forced to buy it back at a higher price than what he or she sold it for, resulting in a loss.
Icahn said he sees "great value" in Herbalife and that Ackman had created an opportunity for him by pushing down the stock price. Herbalife slumped as low as $26.06 in December after Ackman said he was shorting the stock.
Ackman remained firm in his beliefs about Herbalife.
"After 18 months of due diligence, we have concluded that it is a certainty that Herbalife is a pyramid scheme," Ackman said in an emailed statement. "Our goal was to shine a spotlight on Herbalife. To the extent that Mr. Icahn is helping achieve this objective, we welcome his involvement."
The feud between Icahn and Ackman began a decade ago over a real estate company deal that ended up in court. Icahn was forced to pay $4.5 billion to Ackman's firm, and he has never forgotten about it.
"Ackman and I have had a dispute, we've aired it. I don't want to get back into it." Icahn told CNBC.
Icahn says that he neither likes nor respects Ackman and didn't like how he had approached his short position in Herbalife. He has previously refused to comment on whether he held a position in Herbalife. Many have speculated that he would take a stake in the company to strike at Ackman.
Where does Herbalife stand in all of this? "We welcome all parties who see the same value in Herbalife that we do," a company spokeswoman said in an emailed statement.
Herbalife shares have been extremely volatile over the last year. Greenlight Capital's David Einhorn, another prominent Wall Street figure, raised concerns about the company's business in May. The stock dropped sharply after Ackman made his negative case about the company in a presentation in December.
The company has disputed Ackman's statements, saying that he is attacking it solely to benefit his short position in the company's stock. Herbalife executives called a meeting with analysts and investors in January to detail how its business operates and who its customers are.
Ackman replied that Herbalife "distorted, mischaracterized, and outright ignored large portions" of his presentation.