ackman did a great job.ate, kate, ackman was personally attacked. >> no, no, i hear you. >> icahn was -- >> saying he was a liar and -- >> the first stone was thrown by ackman, not icahn. >> how so? >> he said horrible things about him right in the beginning of the interview. >> ackman came back swinging with his statement. >> back and forth. >> he sounded nervous and angry. but he was fact-based. he had the facts on when icahn did a similar thing to make a sort presentation. he had this whole eliot spitzer thing. looking into the merits of the situation. can you bring him on your show. he add point by point rebuttal. and you're right, it was emotional. >> who do you think he had boater case today? >> obviously having done research, i believe ackman's research was very deep. that is what is required when it comes down to this entire story. herbalife. you can't just -- as jim would say, do it because the -- [ inaudible ] >> herb, we got a bad connection there. you got 20 put the tin can and string down. we wi

with bill ackman.ugh, there is still that animosity festering most recently. it relates to the herbalife short that bill ackman has taken so publicly. >> i was concerned with dealing with carl icahn because he does not have a good reputation for being a handshake guy. if you notice the deal written, i insist it is kept under ten pages. i told a lawyer, i wanted an example. they said, no, don't put an example in. you can use words but i want to use an example. i want to be sure there is no confusion here. when carl said this is a merger. the company called bid a hundred dollars a share for the company. the company hired morgan stanley to sell the company. carl raised his bid to $120 ra share. the company made a deal to sell it for a cost of capital lower than carls. they got $136 a share for the company. the transaction is structured as a cash out merger. stick with me. carl has been me lining my reputation. it is important to get to the fact. >> let me start out with my history with this guy. ways mind

on halftime, ackman unplugged. the titan is was live fighting back to defend the role of short sellers in the markets. getting constructive. should you load up on caterpillar shares ahead of things? first our top story is the rally. stocks climbing to levels not seen in five years. raising the question of whether we'll hit new record highs this year. we are trading today's action with pete and john that jar yan, steven weiss and laszlow. how do you see the markets here? it's a continual move higher. >> this is what happens. bull market starts tough. >> you have had good predictionses. you think we'll hit s&p 2800? you made that prediction. i got tweets to ask that. >> it wasn't really a prediction. we said at the beginning of the bull market if we compare what's happening to all of the bull markets in the last 50 years or the possibilities and we put out the possibilities, the one everybody focused on was the number. >> it was a big number. >> so what's going to get us to where you think we'll go to the new highs?

he then called ackman a liar. now, while icahn didn't per se address the fundamentals of herbalife the company, which i wish he had, he did make it clear that ackman could be in trouble because herbalife the stock could be the mother of all short squeezes. >> you've got 20%, and if there's ever a short squeeze, which there well might be in herbalife, what the hell does he do? i'd like him to answer, where does he get the stock when they call back all the stock? >> legitimate question. and then he made a brutal accusation. he said that ackman got short and loud at the end of the year and drove the stock down with a presentation to enhance his returns for his hedge fund. >> i'm not going to the s.e.c. or the ftc, where i believe he goes out and he has 300 people in a room, this is the typical ackman. i wouldn't care if it was anybody else but ackman. but he goes into this room and he gets 300 people and he tells them how bad this company is. it's a classic stuff they did in the '90s. you scare the hell out of people

i thought ackman did a great job and won that debate. he is at risk of a short squeeze.hands that bought it outside of third point which have very strong hands, if there's any fundamental bad news, if there is any traction on some sort of government investigation, this stock will be at 30 very quickly. how long do you think those guys are going to hold on to. to me, i think you have a lot of opportunistic longs. when this thing dropped in half in almost a very short period of time, it has not made a new high for mid december and it's stuck here in a lot of ways. >> that means icahn won. the market has spoken and the stock has rallied back from the ackman low from when he made the announcement. >> right. it's as if nothing happened. >> ackman is not short this stock because he thinks it's going to zero tomorrow. >> the question is there a potential for a short squeeze still. that was carl icahn's point. if there are long in the stock, all they have to do is take that stock, take it off the market, not borrow it and it shrinks the shares outstanding. >> ackman knows his ga

ackman denied that. today i heard some language from you and from your president about the idea that he's motivated by profit and greed. to be sure any hedge fund is looking to make profits. but in this case he said he's going to donate any profits to charity. what do you think motivates him? >> come on, kate. let's be honest with each other here, that he's going to donate all of his profits? he's got participants in that fund, he has got all sorts of different people who are making money out of that fund. who knows where it's really going. those charitable costs for him of fungible. i don't want to get into him and what he's doing and how he's doing. that sounds good but is he going to take 100% of the profit, no participant in his fund is going to get a single penny, 100% of it? i'll believe that when i see it. >> the s.e.c., there are indications reportedly that they've opened an investigation into herbal life. we don't know the details but a senior official told cnbc that multi-level marketing in gen

that ackman has generated.gs me to perhaps the most important point of the story, the value that i can add to it. because herbalife has a ton of money and because the cash flow is strong, ceo michael johnson can buy stock back in the open market, hey, look, even take the darn thing private. it used to be private. if he wanted to. and in two days, he will be able to return to the stock market. that's the s.e.c. law, with $1 billion authorization to start purchasing shares hand over first. he's only used a small portion of that. company is no stranger. six years ago, had 145 million shares. now only 108 million shares. and 8% is owned by loeb and 20 million shares short by ackman. that means johnson is capable of bringing in an ally of monsterous proportion. the mechanics of the stock market itself. the buyers in the stock market are able to take stock and put away. the short sellers have to borrow stock from the owners to sell it, and then hopefully buy it back for a profit. if the shorts can't borrow the stock

and 8% is owned by loeb and 20 million shares short by ackman.means johnson is capable of bringing in an ally of monsterous proportion. the mechanics of the stock market itself. the buyers in the stock market are able to take stock and put away. the short sellers have to borrow stock from the owners to sell it, and then hopefully buy it back for a profit. if the shorts can't borrow the stock first, they will be forced to cover, wall street speak for buying it back, and closing out the position. i have been in that position, as a short seller, where i couldn't find stock and the broker doing the trade literally went into the open market, bought the stock back that i had shorted and closed out my short position at much higher prices than i shorted it at. it was vicious. it crushed my quarter. but it was legal. i was helpless to stop this activity because i was short. i couldn't find the shares to borrow to those who were buying it. hey, it's against the rules. if loeb and his allies buy stock and if johnson steps in with that aggressive buyback fro

i think to your point, even if ackman is right, it's going to take so long to play out.l have an opportunity to sell a lot of premium against that option. >> i don't like this because there's no catalyst that is going to take all the juice out of that. >> stocks going down. just do fewer of them and buy puts outright. got a question out there, send us a tweet. we'll air it after the show on our website. check out our revamped website. in addition to scott you'll find great trader blogs, educational material and exclusive trades. so check out out. here is what's coming up next. >>> hold the phone. carter made a bearish bet on nokia and the stock has dropped enough to make them money. they still have a way to make this trade a winner. find out how when "options action" returns. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade

megainvestors bill ackman and carl icahn going at it.lms were sweating for you, scotty. >> it was fantastic. great viewing. scott wapner you did a brilliant job. and of course for those who do not know the background, why do these two have issues? >> well, mandy, their feud goes back a decade when bill ackman was a young hedge fund manager who did a deal with carl icahn who was then already an investing legend. most recently, the war of words has turned to herbalife which ackman has taken a very public short position in. icahn has blasted him for that and today the whole thing ille live tv. >> in herbalife we simply provided to the public full transparency on this investment, 330 slides in detail, not scaring people, but going through the facts about the company. okay? we did exhaustive research over a year and a half. we'll either be proven right or wrong. okay. we shorted the stock. we have not covered our shares. we believe in what we -- we have more to come by the way. >> right. >> we have some questions the company has given us the

if this last three years, ackman is wrong.it lasts a decade, ackman is so wrong, it's just silly. now this thing really has cash flow. a thesis that says, i got to wait for government is bad thesis. i don't know how many really dodgy companies i've reported to the fcc and what do they do? sometimes they fine them. the vast bulk of the time they don't. >> herb, i'm wondering where we go from here. i know we are looking forward to herbalife's rebuttal and ackman is preparing his rebuttal to that rebuttal. what is the next chapter in the story. >> the this does become the equivalent of the for profit education industry where they go after it and where the industry, people said, they will never go after that industry. the government went after that and in this case you end up with a very hard reset of the business models of these companies. >> and for profit education industry case the victim is at least in part the government. the government giving stupid loans. a relatively easy way of the government reducing the fiscal -- >> jo

forget that big money battle between icahn and ackman. on that but an even bigger clash of the titans exxon mobil and apple nearly neck and neck right now as the most valuable company based on market capitalization. number of shares outstanding multiplied by the stock price. apple shares as you saw, john, hitting a new 52-week low. which stock is the better buy right now? exxon mobil or apple? we'll talk numbers on that on the technical side with ennis tanner with risk reversal.com and the fundamental side steve cortez the founder of vericruz. what do you think on the charts? >> apple has been laid to the wayside. in an otherwise strong market. if we pull up the two-year chart you can see that we're getting close to support levels that i think you can start to put on a trade again. so on the two-year chart you can see in 2011 the 425 area resistance and when it broke in 2012 the stock went on an unhealthy move that turned out to be unsustainable. now we're back to near that the 425 level that was resistance and i think will act as support

ackman has not succeeded in keeping it down.rbalife will not go to ackman's target price. just today, though, they announced they're shutting down a multi-level marketing company of which they called a global pyramid scheme, not unlike what ackman calls herbalife. fortune high tech marketing. and that news caused them to get slammed falling 8.91% today. if he wants to win for real, he needs herbalife to be knocked down for real. however, as we've seen, the longs will need much more if they want a short squeeze. it's odd we haven't seen one already. herbalife has started an aggressive buyback in the purchase roughly 9 million of the company's 113 million shares outstanding. you'd think if icahn wanted to make something happen, he'd go in and do what he did with transocean, buy 5% of the company. herb greenberg who has produced an online explication, but my question is whether that matters. think about the chart followers. we don't hold them to be foolish buyers even as they often revel in their lack of knowledge of the fundamenta

ackman himself has suggested -- the short interest in this thing, when the ackman presentation came out was 20%. and he said that he was the lion share of it. so, you know, obviously we're going to see more people as they listen to his story hit some bids in the stock. i mean, the options activity was overwhelming. 400,000 open interest coming in today. almost 50% of that traded in terms of volume. put buying outweighing -- i actually sold some calls myself. and the logic is this. you know, if you sell may 45 calls on this, you are basically collecting anywhere from $2 to $4 in premium. my guess is, people who held the stock before all of this came would probably be happy sellers in the high 40s, 50 bucks. so, it seems to me the stock is going to face a significant amount of resistance if it should get back up to that level. karen is absolutely right. when the stock becomes hard to borrow, there's an opportunity for a squeeze here and that's probably helping to explain the high volatility. >> got to hit a break here. coming up, inside look at mgm's move into macau. the ceo is here with

. >> and in 2003 i get a call from this ackman guy.he schoolyard. >> carl icahn does not have a good reputation for being a hand shake guy. >> the latest on the icahn and ackman showdown which was brought to you by scott. that was an unbelievable moment. >> thanks. >>> and sales of high end homes surging in december with sellers racing to beat new year's tax hikes. did that torpedo for the market for the new year super broker weighs in later on "the closing bell." ♪ [ male announcer ] how could a luminous protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. [ male announcer ] when we built the cadillac ats from the ground up to

ackman betting against the stock.today revealing he is taking a long position in the name. the stock briefing but now a nice pop on the news. get this, it is now up 24% so far this year. for the past ten months, our very own herb greenburg is working on cnbc investigation ink project called selling the american dream. and herb joins us now. >> by the way, now live on cnbc.com. >> multilevel marketing, long been a point of controversy for the industry that utilizes it. and more investors of companies like haesh al life. since we began. >> reporter: ireporting on herbalife ten months ago, they have generated 15 mi29 billion sales. to get a closer look at the industry, i went under cover with hidden cameras to this jreh al life recrewsment meeting in new york. >> my first six weeks part-time over 9,000 cash in my pocket. then i made over 20 thousand. >> did you really make 20,000 a month doing this? >> she makes 65,000. >> you think? >> i know. >> critic of the pyramid scheme alert says the industry is creating a main st

ackman has been so public. >> an interesting strategy.y profits. i pointed out ackman i believe is in the process of raising permanent capital as well. in this world, it certainly doesn't hurt to have a fairly broad and well-known reputation in some way if you're out there. even if you're going to spend the profits on charity, nonetheless you do benefit if you're right from your ability to raise capital. which, again, i believe he is trying to do. >> busy morning here on cnbc. after the break we'll have an exclusive interview with the ceo of general motors. his first interview since we learned that the government is going to finally sell its entire stake in gm within the next year or so. what does it mean for taxpayers? what is on the line for gm moving forward? they're trying to take chevy worldwide now, dropping the chevy runs deep campaign. we'll talk to dan akerson next on cnbc. at farmers, we make you smarter about insurance. because what you don't know can hurt you. what if you didn't know that boxes by the curb... make you a target

that's what the street has right now on ackman. did that play -- >> definitely.e hone our strategy in the chinese verse merger fraud trade. one of the main firms that exposed that, that would take reports, share them with the public and make money. in those instances, you'd see 10%, 20% rallies off of the trough. and so the fact you have this sharp decline and there were flaws with the thesis, you know, just poised to bounce back. and we felt, you know, after a couple days work, we came, you know, herbalife isn't the most complicated situation, in our opinion. we have enough conviction to go along. we thought you were going to see other guys in. you saw bronte and now third point. we are hearing about icahn. i wouldn't be surprised if there are tiger funds that are long herbalife. and, you know, at the end of the day, sort of ackman against the world. >> thank you. >> it's been a good trade so far, clearly. off of its two-year lows in december, after ackman unveiled the position. it's up 48%. maybe more. roughly that. at what point do you think about exiting the

dan lobe, the hedge fund guy is taking a long position against bill ackman. juicy story.day tomorrow. s.e.c. meantime today opening up a probe into herbalife. all makes for some juicy stuff.

a long standing grudge between bill ackman and icahn turned into a slug fest.indal said the republican party needs to grow up and start being the stupid party. >> the fbi reports they are investigating senator bob menendez on accusations he purchased prostitutes and attended sex parties in the dominican republic. he has rejected this party for months and much of this story frankly is still unconfirmed. joining to us explain the allegations and the newly surfaced evidence, executive editor at "the daily caller." what is the new evidence that has emerged? >> about 36 hours ago we received a cache of documents, about 58 pages of e-mails between a source in the dominican republic, abc news, the fbi and an organization called citizens for responsibility and ethics in washington. these e-mails stretched from last april through mostly through the end of the year through into early december and demonstrate somebody in the dominican republic witrectcontag prostitute, some of them underage was blowing the whistle on the senator and providing specific evidence, the names

dan loeb's point revealing a stake in the firm after dan ackman's short position.erb greenberg is following it from the beginning and, herb, look, you were just here last week telling us about an activist against ackman. >> this is really -- the kind of battle you don't traditionally see, scott. what i find fascinating about it is, look, you know, you don't know why loeb is there until he tells he is there. it will be interesting to see if he says he's done a tremendous amount of work on this industry and that he fully understands, you know, he has a reason, that he's involved in this stock. but i would tell you and as i said on your show just a week ago, that there are other hedge fund managers that are engaged in this who claim they're short the stock, who are politically connected. >> you try to make the case, herb, when you were here last that people on the other side of ackman in part because they don't like the guy. >> that is what's so tremendous about this. >> there's no reason for us to believe that's the motivation behind loeb's position. we don't know wh

you tend to listen. >> and i spoke with bill ackman last night.lled the cnbc exchange with icahn a side show but he doesn't regret it. he believes he's bringing attend to what he called a fraud at her ba light. we're certain to hear more from company executives by the february 19th earnings call. >> this is a fascinating story and i've been following it for several weeks and it blew up on friday. also the s.e.c. is investigating herbalife. what does that mean? >> well, the s.e.c. has yet to take action but they are investigating it. the other thing is that bill ackman is meeting with regulators. that's been a part of his short position. he's continued to meet with local and federal investigators and he told me last night he's going to be submitting a list of questions. herbalife says ask me anything, we'll answer it on the record. he's putting together a list of questions that he's planning to have go public. >> this is part of a public fight like what he had with dan loeb. >> certainly short sellers win. like you mentioned bill ackman is on one s

ackman's comments.esterday, in his letter to ininvestors, he said he had taken a position in morgan stanley, which is quite interesting, because -- a long position because they have just laid off -- i think today is the day, 1600 people. and so you're going to watch that stock. >> and these are more senior level people. more senior level people, so they're looking to cut costs in a big, big way. but seeing as how investors are getting into that, i think that will be more of an issue. >> and there are other companies like this. and i understand the way it works. i've been to presentations where it really does look like you're watching and .it's like, is there ever actually an -- is there ever actually an end user? all of the models she show you how you're going to become rich as a disriber, it has to do with recruiting more distributors underneath you that you get a piece of. and you wonder is it ever really the interface with the customer? and then the other thing about herbalife, a lot of the stuff kno

isn't that what ackman needs to happen? >> i always say if your investment is based on courts, congress or regulatory agencies, you might have a problem. >> not a great catalyst. >> but in this case, it's interesting to see if he is shining a spotlight and it creates a rumbling. >> is it too untouchable to urge somebody to buy the stock? >> my rule, controversy equals sell. if you're going for retirement, don't play this game. >> the company lawyered up a little bit. >> i think if the stock was really trading on fundamentals, it would be higher. think about the last quarter, double digit volumes, margin expansion. they raise the guidance. so the stock is not trading on fund tamental fundamentals. it's very difficult as a long-term investor to be invested in a name like that. >>> gold has taken a break today. the yellow medal is gital is gi some gains. let's go to jackie deangelis. >> the culprit for gold's move today none other than the u.s. dollar. gold is turning lower on today's dollar strength. is this a short-term move

they don't detract from ackman is saying. ackman is about to come out with his questions.nts --. melissa: he is not being baing down at all? >> if you know anything about bill ackman, i know the herbalife people are gearing up for this, he will keep attacking them. he is very persistent. waited for year and years, mbia short to come true. started talking about it being a problematic company back in 2005 way before the financial crisis. made his money in 2008. first part of 2008, i remember this, bond insurers, they started improing, mbia, ambac, and he started cashing in. what people are close to ackman saying this will be a at least a year-long story with both sides fighting it out of the you have two investigations going on. you have an sec investigation into the company and its, what it touts as in its financials. i think the ftc, federal trade commission, is coming back looking at them again. we should point out the legal definition of a pyramid scheme is set by the ftc. lori: if herbalife turns out not to be proved by the ftc a pyramid scheme. >> sec. lori: whatever a

ackman particularly dramatic.d, and i think we have some things to show, loeb had a better year, but both had a pretty good year in 2012. owner of greek debt of course at the bottom. that was a great call. the yahoo! position has worked out well. pershing square, pretty good numbers there, as well. my producer, danielle, crunched a lot of numbers in terms of looking at important trade that ackman made that did not go particularly well, to sell citi and by p&g, very large position again for his $11 billion fund. -- >> can i get in here for a second? i want to make one interesting point. when i met with michael johnson, he asked me about einhorn. and i said i've never seen anything quite like that with the stock following after asking the question on the conference call. and i said what do you think? he said i think that shows hedge fund manipulation. i'm wondering now what he thinks when you have the hedge funds actually coming out in his favor and getting behind each other supporting the stock. >> yeah, it's inter

bill ackman says it's a pyramid scheme and herbalife disagrees, right.r times its daily average, the stock dipped during an after-hour. our own kate kelly interviewed ceo michael johnson. at the investor presentation he counter the bill ackman major short position as we know in the stock which is now currently off its lows. one thing he said, the ceo, that may have led to the selloff was that a huge portion of his distributors are actually consumers as well. >> it's always a misstatement. 90% of our distributors, okay, who are buying our product, and let me just try to clarify this. buy it for one reason, and they pie it for self-consumption. that a misstatement on that day. i was kind of hyped up that day, wasn't i? >> i guess so. before a presentation in the statement, ackman reiterated that it's believed that 90% of herbalife distributors have zero earnings in terms of addressing his firm's questions in the presentation. ackman stated, quote, the company distorted, mischaracterized be a outright ignored large portions of our presentation. whether you

ackman is still apparently in burma, wherever he is, scuba diving.ng to plan a counterattack from the investor meeting last week. that counterattack from what i understand is the next salvo is coming later this month or early february. that is what sources are saying. that said right now what you see is the longs, they know who they are, these are long investors out there basically pounding ackman to reporters every day, basically saying he is guilty of stock manipulation. now what exactly this stock manipulation i can't figure out. you know, i have kind of a testy exchanges with one on my e-mail account, you know, just every day, where he is saying that i'm going easy on ackman and all this nonsense. you know, i want to know what these stock manipulation is for a guy that has an opinion. he has an opinion that herbalife is a pyramid scheme. we should point out at least right now looks like herbalife is more right than ackman. the shares have recovered. >> i was going to follow up, charlie, and suggest has ackman gotten in too deeply with herbalife?

the other thing is that bill ackman is meeting with regulators.been a part of his short position. he's continued to meet with both local and federal investigators and he told me last night he's going to be submitting a list of questions. herbalife said ask us anything we'll answer it on the record. well, he's putting together a list of questions that he plans on having to be very public. >> this is part of another fight between -- with dan loeg over what will happen with the stock, will it go up or down? if it goes down, short sellers win. >> shortly short sellers win if it goes down. bill ackman is on one side, but there are a number of other high profile investors including dan loeg on third quarter capital betting that the shares will go up. >> do we have any any suspicion of where karl icahn is or is this bad blood -- >> well, there are people who have speculated about what karl icahn's position may be or may not be in herbalife, but he is on record saying he won't admit to owning herbalife. >>> the u.s. doping agency is giving lance armstrong

ackman has accused them. in fact the ceo michael johnson actually said this is quote an unfortunate slander against our company, and they've hired several ad agencies to again a quote counter the incredible negativity that has been thrown at our company. they also threw up some hard evidence in their eyes that this is not a pyramid scheme. for instance spending 44 million dollars every year on research and development and also pointing out that roughly 83% of former distributors have a favorable view of herbal life and 63% of those former distributors would recommend herbal life to a friend or a family member in which to become a distributor. we spoke to an investor and an analyst who looks at herbal life and says this is a strong company and he's confident. >> they don't pay anything for recruiting. the evidence that they only pay commissions to their distributors for the sale of product. adam: and of course herbal life making the case that majority of their sales are worldwide to people consuming their prod

even the best investors in the world make mistakes. >> they get it wrong sometimes. >> ackman may bee right, we don't know. david einhorn, famously destroyed the florida land company st. joe. came out, a couple years ago, and said, st. joe, showing pictures, empty houses, no one is buying it. the stock is above where it was in october 2010. even the best investors will make mistakes. >> which would would you back? >> based on everything i know about this company and this industry, herbalife and multilevel marketing industry, i would say the best research on it and best conclusions are by ackman. because i think he did the research and his think his research suggests there is st stigistig significant issues in the industry that must be suggest. >> you guys may have talked about it yesterday -- >> that's okay -- >> trying to get my finger stitched up. didn't work out. >> the issue is you wouldn't be short one and long the other. this is 7b a classic trade in an industry where one is better than the other. it just doesn't make sense. >> thanks, herb for talking on herbalife. it is near

that is what ackman is saying.fe says it does sell stuff however i will tell you one of the problems they had to date was and never saw the real breakdown in sales. they have a lot of distributors, china and everywhere else, but you don't get the impression when you listen to them today that they're actually striking gold, the distributors are actually selling shakes. how do you build a business model of selling protein shakes? and i drink them all the time. lori: charlie, as you know, keep it here on fox business for his interview with herbalife president. thank you again, charlie. melissa: breaking news, live pictures from the white house as we await president obama's nomination, we will bring that to you live next. lori: a look at the winners and losers on the s&p 5000. an overall bullish market, we are back after this. >> announcer: you never know when, but thieves can steal your identity and turn your life upside down. >> hi. >> hi. you know, i can save you 15% today if you open up a charge card account with u

ackman says that this stock is going to zero. >> right. >> and icahn said ackman's going to zero. and that ackman's investors are going to desert him. this is not about the next ten points of herbalife. this is about a major hedge fund going bankrupt or a major supplement company going bankrupt. that's what those guys are framing it as. in the meantime, the stock does nothing. loeb might be buying nothing. what does it mean it does nothing? >> it doesn't mean it's not going to do something. >> mexican standoff. >> herbalife was centered on that argument on friday. >> a long storied history between them. >> how many parallels between that conversation and michael douglas and wall street, i can buy in ten times over. it was amazing. it was amazing. >> icahn, he's been doing this a lot longer. he's 30 years older than ackman. he's the better investor on track record, no doubt. and he's got cahonas that go on forever. what can i tell you. >> was he off his game, though? everybody thought he was rude. >> that's carl. >> that was so typical of carl. very typical of carl. >> i thought th

of being a pyramid scheme herbal life has been labled a pyramid scheme by hedge fund manager bill ackman. although herbal life owners strongly disputes the charge. both herbal life and fortune sell nutritional supplments and have similar business models. herbalife closed at $40.00. the federal trade commission may be the latest entity eyeing the business practices of herbalife. under intense scrutiny since hedge fund manager bill ackman labeled the company a pyramid scheme, herbalife was thought to be the possible target when the ftc announced it would take action against an unnamed company for operating a pyramid scheme. that company turned out to be hi-tech marketing, but it has lots in common with herbalife. both companies sell nutritional supplements and have similar business models. president obama heads to nevada today -- where he will deliver a speech regarding immigration policy. yesterday -- a group of eight bipartisan lawmakers unveiled an immigration reform plan -- calling the proposals "tough but fair." the proposals would make it possible for undocumented immigrants to apply

ackman bet one billion dollars against herbalife's stock, and called for the ftc to shut it down. herbalife shares were down 70% at $39 thursday. the nomination process for the next treasury secretary is moving forward with president obama naming jack lew as his pick. "i trust his judgement, i value his friendship, i know very few people who have greater integrity than the man to my left." lew currently serves as the chief of staff in the obama administration and could become treasury secretary when timothy geithner leaves later this month. joining us now via skype with insights is jim bianco of bianco research. how is wall street responding? > > lukewarm on the jack lew nomination. they're not really that thrilled. > other than lew's poor penmanship, how well will lew's no-drama approach play out in the upcoming debt ceiling talks? > > in the debt ceiling talks it is going to be interesting. other than the no drama, he has got a history of being confrontational with republicans, and that is going to be difficult because that is who he's got to deal with. > didn't he once work on

right here, clearly stealing for a battle with ackman. let's be honest, it is bad optics.g his bid, the stock down about 8% year to date. >> next one we have is exxon with a cut. >> how do you pronounce that? is that an aussie bank? >> i think americans pronounce it macquarie. snrs it is believed that they will struggle to grow production but this is what is interesting. maybe as an aussie, you can help me understand this. they cut the target from 91. the stock is at $90.78. so they still show 8 plus bucks of upside even on downgrade. >> even on downgrade. go figure. even the aussies a bit confused by that one. is the biggest gainer, is it not be on the nyc. >> one of the biggest gainers, up 14.4%. yeah, fourth quarter loss bigger than projected but the stock is soaring because the company says sales going forward will trounce wurnt estimates. coming 06 a very difficult 2012 but free scale is up 31% this year. raising price target is 16 bucks from 12. and holy mackerel. >> yeah. what a gain on this one, right? fell 13% but core earnings improve. there you good, better than

. >> is this the polite version of ackman and icahn? >> this is the european version. >> there's no cursing? wa do they say over there? >> you can tell nat rothschild is a more fiery character than the ceo whom we spoke with. i wouldn't put it past him, necessarily, but i think these gentlemen are trying to keep it professional. i'm just surprised whether it's the incident you referenced or today, how personal these attacks become. the real risk is what's best for the shareholder in the long run has gotten overlooked. >> kelly evans in london, thank you for that. we'll see you in a little bit. >>> coming up, we're going to search for value in the markets as the dow flirt wes 14,000 and the big question of the day, should you yahoo!? the search engine beating the street, but is ceo ma ris ya hire making the right moves to get your investment dollars? as we head to a break, here is marissa mayer talking business from davos. >> yahoo! has always been a very friendly company, because of our focus, it's also -- in addition to technology, but

very interesting morning here in terms of herbalife's defense in charges against bill ackman. among other things they are a pyramid scheme. they spent about two hours speaking to investors. as well as take something q and a afterwards. i just want to give you the highlight of the latter part of the presentation, which is bring flg a consult front northwestern university who defended the pyramid scheme allegations in particular. she talked about a lot of people getting into herbalife sales because they want to get into the product themselves. they want it receive a discount. this self consumption as they call it is perfectly legitimate. she also talked about the notion of inventory loading, which is to say the distributors, who also buy the product themselves, will buy extra product because they intend to sell it to customers in the future. that might distort the sense of sales. they are future sales, not real ones. she said this does not go on. these are two examples of their defense. moreover, i talked to michael johnson about an assertion he made on our air december 19th be,

recovered everything it lost from the bill ackman -- >> you have a lot of motivated buyers.u have a signal, all you have to do is validate it. what do i get my guys to do? do some research on herbalife. they are screaming buy to me. anybody that shorts this stock has to play defense unless ackman has a catalyst that is not himself. >> well, but to your point, karen, you are saying the short squeeze, it could theoretically continue as the shorts get out, there could be more in but if you take the shares off the market -- >> out of circulation. >> it becomes smaller and the squeeze becomes more painful. >> and guy being as old school that he is -- >> that's my thing. >> i am old school. if you think this hasn't happened, it happened before. in the early 2000s, irvin jacobs, probably been on the network from time to time and carl icahn, who is a regular on the network, butted heads where jacobs actually took out an article empl'e imploring people short sales. and it went from $4, rallied to $18. he wound up being right and then carl wound up winning in tend. >> happens a lot. >

you may have heard about this conversation we had on friday with bill ackman.taken a position. he's wanted the ceo bob mcdonald out or he's suggested he's not the right guy for the job. let's listen to mr. ackman and then we'll react. >> base oddtown last three years of p&g it looks like bob is not the right person for the company but if the company can make a dramatic company, i hope that bob can be successful and make it. >> don, what's your reaction? >> well, the other day we had our fourth quarter call, and, again, my son steve commented that if one wanted to be an activist, i tlink are a lot of places where if you wanted to be critical of management or see some changes, this would not be the first one to attack. we've met -- bob's met with us, and i see him as a solid operating guy. and i think that, you know, a lot of these consumer companies have had a bit of a headwind margin pressure because of costs and pressures that are starting to dissipate. so -- and their margins are actually down from where they were a few years ago and if you remember procter &

the one thing with ackman, though, we have asked ackman to come on. i know feel pretty well.iewed you have to watch your rhetoric. dagen: he laid the case out, but he did not call the company names. >> i do not think mbia can be considered a ponzi scheme. it is quick and dirty money. did you go into this other business of securing prime debt. you can make a case that any bank is a ponzi scheme because they lend out more money than they have at that moment. and that makes them though bernie madoff of finance. he was right about the notion. charles: to train one point, i looked at that slide. you do not need the name-calling . you look at their products versus other consumer goods products and their gross margins of 80% versus 40s and you say, while back, there is something here without necessarily having to go to the next step. most of the time the distributor gives the product and they cannot sell it. charlie: they apparently dropped the investigation. they were investigated on a lot of these claims. it looks like they want to reopen the investigation. [talking over each othe

last week on halftime bill ackman had this to say about j.c.ney. >> people criticizing them for taking away the sales last year and going to every day low price. some people have noticed the company is starting to bring back sales and clearance. it's going to be a balance between every day low pricing and sales and other ways to drive traffic and to give the customer value which is something the company stands for. >> all right. that conversation happened before the brouhaha. so it was sort of lost. >> yes. >> that comment from ackman. what is your reaction to it? >> i think looking at -- i think what ackman has to say about j.c. penney is really, i don't give it much credibility. he's been dead wrong on the stock. but i actually bought j.c. penney stock this morning because i think the stock was over sold. i thought that a little bit of positive news like we got here could get the stock rallying back to the $22, $23 level. keeping in mind, on j.c. penney just about 50% of the float is short. keith mccullough over at head giant had a great call

. >> bill ackman runs a hedge fund, he has a big beef., a fraudulent company. he laid out his case in a big presentation last month. herbalife, the basic idea is salespeople sell the products, they recruit new members and get a portion of those sales, but ackman spoke to cnn money and says it's about more than selling the products. listen. >> what think really sell and what their distributors make money from is by what they call a business opportunity. the business opportunity is to sell the business opportunity to your friends who sell the opportunity to their friends. >>> keep in mind ackman's hedge fun is invested in herbalife. he shorted the stock, meaning he's betting $1 billion it will fall to zero, but ackman does say if the stock falls and he makes a billion, he'll go ahead and donate that money to charity, but herb alialife i. and we have more of the interview on cnnmoney.com. >>> a new york paper names names and finds -- why one lawmakers in nearby new jersey says, not in my state. when you have diabetes... your doctor will say