Herbalife Circus: Expect More Entertainment (Update1)

NEW YORK (TheStreet) -- Let the games begin.

Just a month after their very public battle on CNBC, the fight between Carl Icahn and Bill Ackman just ratcheted up another level, with Icahn revealing he has close to a 13% stake in Herbalife (HLF) .

Icahn filed a 13D on Thursday, showing he has accumulated a stake in the multi-level marketing (MLM) company. The interesting part is that it's mostly in options, and the majority of it was accumulated this week, in anticipation of a deluge of regulatory filings.

In the filing, Icahn noted that Herbalife "has a legitimate business model, with favorable long-term opportunities for growth. The Reporting Persons Icahn intend to have discussions with management of the Issuer regarding the business and strategic alternatives to enhance shareholder value, such as a recapitalization or a going-private transaction."

Ackman, through his Pershing Square Capital Management hedge fund, is short some 20 million shares of the company, which he called a fraud last year. Ackman has even gone so far as to set up a Web site devoted to his thesis on the company, factsaboutherbalife.com.

The short position caused Herbalife to respond last month, with executives calling the claims false. "The allegation that Herbalife is a pyramid scheme is bogus. Make no mistake: Today's announcement isn't about Herbalife's business model. It's about Bill Ackman's business model," the company said in a statement.

The Wall Street Journal reported last month that the Securities and Exchange Commission has opened an inquiry into Herbalife.