Bill Ackman is a rockstar in the world of hedge funds, and his latest crusade is to bring down nutritional supplement giant Herbalife. His success at shorting companies in the past will be put to the test in this showdown.

Ackman was convinced of the untenability of Herbalife, over one year ago, after researching with his hedge fund team. He then went public with the information that winter, in a highly touted three-hour presentation. His scathing analysis set the internet abuzz.

Herbalife, in Ackman's opinion, had the marks of a company ripe for a takedown. He accused them of having unusually high prices, tricky marketing, and being at heart a pyramid scheme disguised as a business. That would be astounding, given the $4.5 billion revenue that the company pulls in.

The hedge fund manager proceeded short sell the company to the tune of 20 million shares. No one ever accused Ackman of only talking the talk.

Part of this bet includes the assumption that the U.S. regulators will intervene and disrupt the company's business, perhaps even shuttering it completely. This is far from certain. However, the bad press generated by Ackman drove Herbalife shares down 32 percent within three days.

Herbalife of course fought back with its own rebuttal, bringing shares back up, albeit 6 percent lower than before Ackman's presentation.

Dan Loeb, of hedge fund Third Point, produced an open letter recently stating that he believes Ackman's crusade has no merit. Specifically, he pointed out that the FTC would not shut down a company just because a billionaire hedge fund manager (Ackman) brought it to their attention. He also pointed out that Herbalife has been running for three decades, and so their merits must outweigh flaws in their business model.

Even in the worst case scenario, Loeb takes comfort in the fact that "80 percent of Herbalife's revenues come from overseas" - rendering most of its revenues unregulated by the U.S. government.

Still, any regulatory action would be bad for the company. And Ackman has been right before - remember Target and Canadian Pacific railway? What it comes down too, though, is his word against Herbalife and its investors. Let the rumble begin.