Herbalife accused of being a pyramid scheme= 1 Billion Short Attack

Herbalife Ltd. shares soared after documents revealed corporate raider Carl Icahn's huge stake in the Los Angeles-based maker of nutritional foods and supplements.

Shortly after the opening bell on Wall Street, Herbalife shares added $4.72, or 12.3%, to $42.99.

A regulatory filing Thursday showed Icahn has paid $214 million for 14 million Herbalife shares, or 13% of the company.

Icahn previously would not disclose whether he had invested in the company. The storied billionaire investor recently squared off, on live television, with fellow New York hedge fund manager Bill Ackman, chief executive of Pershing Square Capital Management.

On Dec. 20, Ackman accused Herbalife of being a pyramid scheme that defrauds distributors of its products. He announced a $1-billion "short" against the company, a massive bet that its stock will fall.

Herbalife shares plunged after Ackman's presentation. The company launched a public-relations counter-attack and accelerated a share buy-back. With Friday's pop in Herbalife stock, the company's shares were  trading slightly higher than they were before Ackman's presentation.

That raises the possibility of a "short squeeze," a run-up in demand for a stock that could wind up costing investors like Ackman, who have bet the stock will decline.

The U.S. Securities and Exchange Commission filing said Icahn would discuss with management the possibility of taking Herbalife private or finding new capital.

Icahn believes the company has a "legitimate business model, with favorable long-term opportunities for growth," according to the filing.

Ackman responded to Icahn's stake in a statement Friday:

“We invest based on a careful analysis of the facts. After 18 months of due diligence, we have concluded that it is a certainty that Herbalife is a pyramid scheme.  Our conclusions are unaffected by who is on the other side of the investment.  Our goal was to shine a spotlight on Herbalife.  To the extent that Mr. Icahn is helping achieve this objective, we welcome his involvement.”

Canadian stocks hit a one-week high on Friday,

By Claire Sibonney


TORONTO (Reuters) - Canadian stocks hit a one-week high on Friday, led by financial and energy shares, as positive economic data from China, Europe and the United States offset weak domestic numbers and as Manulife Financial Corp (MFC.TO: Quote) rose on reaction to its results.
China's exports and imports surged in January, the country's first hard data of the year showed, pointing to robust domestic demand and a pick-up in the economy.

That more than offset news that Canada's economy unexpectedly shed 21,900 jobs in January, delivering a reality check after months of outsized employment growth, and confirming forecasts of slowing economic expansion.

"I think the next couple of weeks now you'll see the Canadian market react to the specific earnings, more so than the overall economic picture," said John Kinsey, portfolio manager at Caldwell Securities, noting volumes were very light on Friday because of the snowstorm hitting Canada and the U.S. Northeast.

Manulife, which reported a return to quarterly profit on Thursday, was one of the most influential stocks in leading the market higher. The insurer extended the modest gain it made on Thursday after several analysts raised their price targets for the stock. Manulife shares were up 2 percent at C$14.84.
Toronto-Dominion Bank (TD.TO: Quote) rose 0.7 percent to C$83.43.

The Toronto Stock Exchange's S&P/TSX composite index .GSPTSE ended up 45.31 points, or 0.36 percent, at 12,801.23, after touching 12,823.50, its highest point since January 30. The TSX ended the week up 0.3 percent.

The index was not riding as high as its counterparts on Wall Street, with the Nasdaq at a 12-year closing high and the S&P 500 index at a five-year peak. .N   Continued...