Tara Lachapelle is a Bloomberg Gadfly columnist covering deals. She previously wrote an M&A column for Bloomberg News.

Guys, Carl Icahn isn't looking to sell his entire Herbalife stake. That was so last month. Instead, he's thinking about potentially buying more -- maybe even half the company! 

There you have it, the latest twist in the Icahn-Ackman game of how far up/down can the stock price go. Quick recap: Bill Ackman, manager of hedge fund Pershing Square Capital Management, believes Herbalife is a pyramid scheme worth nothing and has bet a lot of money on this. His rival Icahn takes the opposite stance, betting the stock is worth more than its current price, and he's now triggered speculation that the maker of nutritional products could get acquired.

While this battle of billionaires has produced some entertaining TV moments, it's been a roller coaster for Herbalife shareholders. Do they really want to stay on this ride? 

He Said, He Said
This chart may seem overwhelming, but it's what Herbalife investors have endured. The stock makes large swings based on what Carl Icahn and his rival Bill Ackman are saying about it on any given day.
Source: Bloomberg

The shares have advanced about 10 percent over the past six months, but that figure doesn't capture the many large swings that have occurred during that span. Herbalife's annualized volatility --  which, simply put, measures the degree to which the stock has fluctuated and is expressed as a percentage -- is about 43 percent over the last 180 trading days, according to data compiled by Bloomberg. That's higher than the median of 28 percent for members of the Russell 1000 index and 27 percent for the S&P 500. 

Herbalife surged as much as 6 percent Wednesday because of remarks Icahn made at a conference Tuesday afternoon, which is how this stock works. He said that even though Herbalife's nutritional shake gave him gas when he sampled it, he believes in the company and its products -- so much so that he's considered making a tender offer (though he says he has no "stated intention" of doing so right now). The investor already owns a 21 percent stake and is able to raise that to 35 percent. However, he says that he's asked the U.S. Federal Trade Commission for permission to buy up to 50 percent. It's a contrast to the reports in late August that said Icahn was looking to exit Herbalife, which temporarily dragged the stock down (he wouldn't comment on this at the conference).

A tender offer "is something I've thought about. Doesn't mean I will. And I think there are other people that might. I think Herbalife is certainly a candidate to go private. In fact, frankly, wearing my shareholder hat, I think Herbalife is a lot better off private."

Herbalife shareholders are tickled pink over the prospect of a takeover offer. But banking on a bid -- especially for a company mired in ethical scrutiny -- is a fool's errand, as we've seen time and time again with other companies whose shares have been tossed around by fruitless takeover chatter (Twitter most recently, for example). Herbalife doesn't trade on its fundamentals, the quality of its business. The biggest hard news that's come out about Herbalife recently was that it settled with the FTC, agreeing to pay $200 million to compensate victims duped by its get-rich-quick promises and to make sweeping changes to its business practices, although they weren't deemed a pyramid scheme.

Brace for Turbulence
As Carl Icahn and Bill Ackman continue to duke it out over whether Herbalife is or isn't a legitimate, valuable company, the large swings in its share price make it a risky investment.
Source: Bloomberg

With the FTC settlement out of the way, Herbalife's stock is left to be a ping-pong ball bounced back and forth by comments from Icahn and Ackman. Discussion of earnings and valuation don't take place all that much because Icahn and Ackman are the ones driving the headlines with their contradictory investment theses. Here's a chart about Herbalife's unremarkable financials, if anyone cares:

Forgotten Fundamentals
Herbalife is planning to overhaul its business practices and posted second-quarter results that topped analysts' estimates. Still, revenue is down about 8% from two years ago.
Source: Bloomberg

When the two biggest analysts on a stock are dueling hedge fund managers, is it worth chasing? You might get dizzy, or worse.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Tara Lachapelle in New York at

To contact the editor responsible for this story:
Beth Williams at