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Herbalife shares climb as two billionaire investors square off

Bill Ackman, who has called the company a pyramid scheme, and Carl Icahn, who reportedly has a long position on the company, trade barbs on live TV.

January 25, 2013|By Stuart Pfeifer, Los Angeles Times
  • Bill Ackman, left, of Pershing Square Capital Management, shown last year, and financier Carl Icahn, shown in a 2006 photo, presented vastly different views of Herbalife on CNBC. The firm's shares soared during the investors' exchange before trailing off and ending the day up 1%.
Bill Ackman, left, of Pershing Square Capital Management, shown last year,… (Pawel Dwulit / Shiho Fukada,…)

Herbalife Ltd. shares rose after a profanity-filled battle on live television between two billionaire investors with vastly different views of the Los Angeles company.

Bill Ackman, who has an enormous short position on Herbalife and has called the company a pyramid scheme, and Carl Icahn, who reportedly has a long position on the company, traded personal insults during a nearly 30-minute telephone discussion aired live Friday on CNBC.

Icahn called Ackman a "liar" and said: "He's got one of the worst reputations on Wall Street."

Ackman countered: "The big issue about Carl Icahn is he's not used to someone standing up to him, particularly a little guy like me."

At one point, the show's host, Scott Wapner, reminded Icahn that he was on live television and asked him to refrain from using profanity.

If investors were the judges, score a victory for Icahn. Herbalife shares soared during the exchange before trailing off and closing up 1% for the day.

Ackman, who said he has a $1-billion short position on Herbalife, made a widely publicized presentation in December in which he laid out his case that the company is a pyramid scheme in which most of its distributors lose money and only a few at the top get rich. The company has denied the allegations, saying many of its salespeople buy the product for personal use and do not intend to make big profits.

Icahn said he thinks the short position was irresponsible and put Ackman's investors at risk.

"Carl, you think I want to invest with you?" Ackman said.

"I wouldn't invest with you if you were the last man on Earth!" Icahn replied.

stuart.pfeifer@latimes.com

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