If anything, Ackman, should be investigated, Herbalife says. Here’s the statement from the company:
“We regret that the National Consumers League has permitted itself to be the mechanism by which Pershing Square continues its attack on Herbalife. If anything, it is Pershing Square that should be investigated by appropriate authorities. Its actions are motivated by a reckless $1 billion bet against the company based on knowingly false statements about Herbalife. Those statements unquestionably cause harm to our consumers and investors and indeedallconsumers and investors.
“Herbalife is committed to providing consumers with high quality products that address a real need: weight management and nutrition. Our consumer-protection rules not only meet, but in many cases exceed the standards prescribed by the Direct Selling Association (DSA). Herbalife is a long-time member in good standing of the DSA, which has 182 member companies, including Avon, Amway, Nu Skin, Primerica and The Pampered Chef (aBerkshire HathawayBRKB+0.20%company).
“Herbalife is a financially strong and successful company, having created meaningful value for shareholders, significant opportunities for distributors and positively impacted the lives and health of its consumers over the company’s 33-year history.”
Gold’s worst start to a year in a quarter century and the biggest sales by investors on record are increasing concern that bullion’s longest rally since the end of World War I is ending.
Investors sold 106.2 metric tons valued at $5.4 billion fromexchange-traded productsin February, the most since their creation in 2003, data compiled by Bloomberg show. Another 26.1 tons was cut since then. Credit Suisse Group AG and Barclays Plc say the 12-year rally will peak in 2013 and billionaireGeorge Sorosreduced his stake in the biggest ETP by 55 percent in the last quarter. Prices are within 4 percent of abear marketafter the longest run of monthly losses since 1997.
Samsung is turning up the heat onApple(AAPL), announcing a direct competitor to the iPad Mini and making plans to debut its next-generation smartphone on Apple's home turf.
The South Korean consumer electronics giant has become increasing bold since it took the global lead in smartphone sales from Apple's iPhone with its Galaxy handsets last year.
Samsung on Sunday introduced an 8-inch tablet that competes with Apple's 7.9-inch iPad Mini. Samsung's Galaxy Note 8.0 includes a stylus, runsGoogle's (GOOG) Android software and is capable of showing multiple apps on the screen at the same time,the company said. And unlike the iPad Mini, the Galaxy Note 8.0 can double as a phone. The device will be available in the second quarter.
This week J.C. Penney released itsfourth quarter earnings resultsand they were dismal. Comparable store sales nosedived by 31.7% in the fourth quarter of 2012 versus the prior year. Internet revenue sank by 34.4%, and gross margin dropped from 30.2% to 23.8%.
What's causing this financial Armageddon? The sole culprit is J.C. Penney's new "Fair and Square Every Day" low pricing strategy. In January 2012, Ron Johnson, Penney's CEO, announced that instead of offering weekly sales, the retailer was reducing prices across the board. Johnson's pitch to consumers was in essence, "Why wait for a sale? We have low prices all of the time." To be clear, Johnson was not claiming that Penney's everyday prices are the lowest, simply "fair."
Hedge fund manager James Dinan is wagering that ailing retailer JC Penney Corp will continue to perform poorly and in the process he is taking on the company's biggest bull, billionaire investor William Ackman.
Dinan, who heads York Capital Management which manages $15.1 billion, this week told an audience at a Morgan Stanley investing conference in New York that the firm is shorting JC Penney's debt, effectively taking a dim view of its future.
The plaintiffs charge that Goldman Sachs had a fiduciary duty to maximize eToys’ take from the I.P.O. Instead, Goldman purposely set an artificially low price, so that its real clients, the institutional investors clamoring for the stock, could pocket that first-day run-up. According to the suit, Goldman then demanded that some of those easy profits be kicked back to the firm. Part of their evidence for the calculated underpricing of eToys, according to the plaintiffs’ complaint, was that Lawton Fitt, the Goldman executive who headed the underwriting team and was thus best positioned to gauge the market demand, actually made a bet with several of her colleagues that the price would hit $80 at the opening. (Through a Goldman Sachs spokesman, Fitt declined to comment. Goldman denies that it did anything wrong, about which more shortly.)
On some level, this argument — between those who believe companies are routinely sold down the river by their underwriters and those who insist that underwriting requires a complex balancing of the interests of both company and investors — has been going on ever since. Just a couple of years ago when the social media companyLinkedIn went publicand the stock quickly doubled,I wrotethat the company had been scammed by its underwriters, Morgan Stanley and Bank of America’s Merrill Lynch unit. Money that rightly belonged to the company had instead gone to investment clients, I argued. A number of market observers responded by saying that I lacked a nuanced understanding of the complicated dynamics between companies, investors and underwriters.
Recently, however, I came across a cache of documents related to the eToys litigation that seem to tilt the argument in favor of the skeptics. Although the documents were supposed to be under seal, they were sitting in a file at the New York County Clerk’s Office, available to anyone who asked for them. I asked.
What they clearly show is that Goldman knew exactly what it was doing when it underpriced the eToys I.P.O. — and many others as well. (According to the lawsuit, Fitt led around a dozen underwritings in 1999, several of which were also woefully underpriced.) Taken in their entirety, the e-mails and internal reports show Goldman took advantage of naïve Internet start-ups to fatten its own bottom line.
Goldman carefully calculated the first-day gains reaped by its investment clients. After compiling the numbers in something it called a trade-up report, the Goldman sales force would call on clients, show them how much they had made from Goldman’s I.P.O.’s and demand that they reward Goldman with increased business. It was not unusual for Goldman sales representatives to ask that 30 to 50 percent of the first-day profits be returned to Goldman via commissions, according to depositions given in the case.
According to data compiled by the plaintiffs, Capstar Holding, an investing client, made a series of pointless trades solely for Goldman’s benefit. The lawsuit quotes an investment manager at the firm, Christopher Rule, as saying that 70 percent of his trading activity in May 1999 was done to generate commissions for Goldman, “pursuant to an ‘understanding’ with his Goldman broker that he needed to generate money for Goldman in order to receive I.P.O.’s.”
George Costanza from the timeless-sitcom Seinfeld was known for some fine exits. Over the course of several occupation changes, he finally figures out that leaving on a high-note can have a positive impact on someone.
"At the same time, there are millions of Americans you can't find in monthly job reports. They've been unemployed so long they're no longer counted, or they're working just a few hours a week in jobs that can't support them. The Bureau of Labor Statistics also said yesterday that what they call the labor force participation rate fell again to 63.5 percent, the lowest number since 1981."
"Whole FoodsMarket, the grocery chain, on Friday became the first retailer in the United States to require labeling of all genetically modified foods sold in its stores, a move that some experts said could radically alter the food industry.
A. C. Gallo, president of Whole Foods, said the new labeling requirement, to be in place within five years, came in response to consumer demand. “We’ve seen how our customers have responded to the products we do have labeled,” Mr. Gallo said. “Some of our manufacturers say they’ve seen a 15 percent increase in sales of products they have labeled.”
Genetically modified ingredients are deeply embedded in the global food supply, having proliferated since the 1990s. Most of the corn and soybeans grown in the United States, for example, have been genetically modified."
"Ever since the bitcoin cryptocurrency first launched and achieved initial success, institutional investors and hedge fund managers have secretly sought a regulated investment vehicle for bitcoin placements. Malta-based Exante Ltd. has the solution with their newBitcoin Fund.
“I hope our fund will be the first hedge fund to take advantage of using bitcoins,” explains Managing Partner Anatoliy Knyazev. Exante actuallyannouncedthe fund in October last year, but they did not make a serious effort to market it. Now, with more institutional interest emerging, they agreed to provide this update toForbes.
Although any person or entity can acquire and store bitcoins on their own, institutional investors are typically restricted in the types of assets available within their investment charter. Similar to a mutual fund or hedge fund for alternative assets, Exante’s Bitcoin Fund permits institutions and high-net worth individuals to access the vibrant bitcoin market with a licensed product and this alone is an innovative development."
In spite of the two-week Lunar New Year holiday in February, which typically translates into a slower period for economic activity, China's export numbers blew past expectations, coming in more than double of what was forecast, raising questions over the reliability of the data.
The world's second largest economy on Friday reported a 21.8 percent jump in exports for February from a year earlier, versus forecasts for a rise of just 10.1 percent. Imports, meanwhile, declined by 15.2 percent over the same period, the largest drop in 13 months, compared with expectations for an 8.8 percent fall.
There are three main reasons to question this data, according to experts, including Zhiwei Zhang, chief China economist at Nomura.
First, Zhang said, the data is "inconsistent" with exports out of neighboring countries including South Korea and Taiwan, which saw a decline of 8.6 percent and 15.8 percent, respectively, last month. He noted that China and South Korea's export growth is positively correlated. For both countries, the U.S. and Europe are key export destinations.
Analysts are beginning to raise concerns about Canada's near-term economic growth. The nation's central bank is holding the overnight rate at 1% and will likely maintain this level for some time to come.
The ongoing saga of Herbalife (HLF) continues to grab headlines, especially since the controversies and the subsequent gyrations in HLF shares have centered upon high visibility characters and their actions, more than metrics and fundamental analysis. The Ackman vs. Icahn struggle is like a "title bout," and it has taken on story-book, if not comic-book proportions. Indeed, the drama continues to grow, and the multi-billion dollar stakes have attracted the attention of average investors, the moguls of Wall Street and the2.7 millionHerbalife distributors in 75 countries around the world. Finally, adding additional fuel to the fiery story is that Mr. Ackman's claims actually threaten the very existence of HLF, so it's not just a controversy based upon differing opinions about valuations.
"Would the iPhone have sold as well if it was called the "TelePod"?
Apple Inc.'s former advertising lead Ken Segall told a college marketing class that the Cupertino company considered naming its phone the TelePod because it sounded like a futuristic twist on the word "telephone" and had similarities to Apple's iPod, which was very popular at the time.
Speaking to students at the University of Arizona, Segall also said Apple considered some other names, including iPad, which the company eventually used for its tablet instead. The Apple news website 9to5Mac reported on the talk."
"First, I have expressed the problem with Ackman's pyramid allegation with a simple example.
Second, I have discussed whether Pershing Square has got the value proposition of Herbalife products right and if Herbalife products are really overpriced.
Third, I have addressed short sellers' myth that Herbalife's high gross margin means that it is overpricing its products and discussed how to compare Herbalife's Gross Margin with a non MLM company on an apple to apple basis."
Today the infamously feisty Mayo got a chance to shake it off on CNBC's Squawk On The Street with Carlos Quintanilla.
Mayo's bottom line: It's time for shareholders to start getting active. He's started buying 100 shares in companies that he'd like to see improve. The point, of course, is that he can get rowdy at investor day should he so choose. Citigroup, Mayo said, is his first priority right now.
"I think the change of CEO at Citigroup could be epic," he said.
A few words on his thesis for Citi and Quintanilla was on to the question on everyone's mind — Does having spats with CEOs make Mayo a better analyst?
"I think it's the job of an analyst to hold management's feet to the fire, ask questions such as... how are you going to create more value for shareholders?," Mayo responded. "By all means that's my job that's every analysts job to do that. I don't think it's been done enough with regard to Wall Street. Look, when you look at the financial crisis, investors weren't doing their job, regulators weren't doing their job, nobody was minding the store. So we have a choice right now, either we investors can step up to the plate or you're going have more regulation. I prefer the former — that shareholders, me, other analyst like myself speak up...at annual meetings."
Riccardo Banchetti, whose work packaging derivatives at Lehman Brothers Holdings Inc. got him the top European job at the firm a week before it failed, is now making a living unraveling the kind of deals he once developed.
Banchetti worked withBanca Monte dei Paschi di Siena SpAto uncover 730 million euros ($955 million) of losses that the world’s oldest bank hid through the use of derivatives. The Italian banker, who also advisedJPMorgan Chase & Co. (JPM)on its defence against fraud charges over swaps with Milan, has scrutinized more than 10 billion euros of transactions since leaving Lehman, according to a person with knowledge of his activities who asked not to be identified because they weren’t authorized to speak publicly.
Recently some investors have privately wondered about how prudent it is for Ackman to have been so public about his short investment in Herbalife where he seemed to have all but tempted other investors like Daniel Loeb and Carl Icahn to take the opposite side of the bet.
Imagine that you have been accepted to Harvard Business School. The ivy-covered buildings and high-powered faculty whisper that all you need to do is listen to your teachers, get good grades and work well with your peers. After two years, you'll emerge ready to take the business world by storm. Once you have that degree, you'll have it made.
Even if foes of theKeystone XL pipelineblock it, companies seeking to get Canada’s oil sands to U.S. and world markets could travel the old-fashioned way: by rail.
While TransCanada has been trying to obtain a U.S. permit to build the 875-mile northern leg of its Keystone XL pipeline, Canadian and U.S. railroad companies have been busy installing new track and loading facilities to carry the oil sands crude from northern Alberta to refineries in the United States and Canada.
Rail shipments of Canadian crudeoil sandsare on track to quadruple this year. Producers and refiners are scrambling to buy their own tank cars in order to lower the cost and increase the certainty of transport. Industry sources said that there is an 18- to 24-month waiting period for new tank cars in Canada.
The rail expansion is a central issue in the debate over whether the State Department shouldgrant a permitfor the northern leg of the Keystone XL pipeline, which would run from Hardisty, Alberta, to Steele City, Neb.
“Because of the flexibility of rail delivery points, once loaded onto trains the crude oil could be delivered to refineries, terminals, and/or port facilities throughout North America, including the Gulf Coast area,” the State Department report said.
That would undercut an argument used by Keystone XL opponents, who say that blocking the pipeline would create a transportation bottleneck and slow down development of the oil sands, a major source of greenhouse gas emissions.
Environmentalists have not targeted rail terminals the way they have the Keystone XL. In an e-mail, 350.org spokesman Daniel Kessler wrote that rail shipment accounted for only 0.69 percent of western Canada’s oil supply in 2011.
“Transporting oil sands by rail grabs headlines but will likely remain a very small percentage of total shipped oil sands,” he wrote. “Even if there was a massive increase in rail transport — it will remain a niche service for oil sands producers.”
Susan Casey-Lefkowitz, who directs the international program at the Natural Resources Defense Council, said that western Canada lacks the rail infrastructure to match the Keystone XL capacity.
“Keystone XL is a driver of expansion,” she said. “Rail doesn’t appear to be an alternative for the quantities that will be transported by Keystone XL.”
Not so, others say.
In January, Peters & Co., a Canadian research and investment advisory firm specializing in the oil and gas sector, estimated that this year Canadian railroads would nearly triple oil deliveries from 70,000 barrels a day to 200,000 barrels a day, which would be more than a quarter of the capacity of the Keystone XL. But the amount of oil on Canada’s rail system has already hit 150,000 barrels a day and is on track to hit 300,000 barrels a day by year’s end.
Peters said that at least two oil sands producers, Suncor and MEG Energy, are adding rail capacity. Canadian National Railway announced on Thursday that it expects to double its crude shipments this year and will expand storage and other facilities in Geismar, La. Two large heavy crude refineries are located there.
“Crude oil by rail is one of CN’s fastest growing businesses,” CN Executive Vice President Jean-Jacques Ruest said in a statement.
The nation’s biggest banks wrongfully foreclosed on more than 700 military members during the housing crisis and seized homes from roughly two dozen other borrowers who were current on their mortgage payments, findings that eclipse earlier estimates of the improper evictions.
Bank of America, Citigroup, JPMorgan Chase and Wells Fargo uncovered the foreclosures while analyzing mortgages as part of amultibillion-dollar settlement dealwith federal authorities, according to people with direct knowledge of the findings. In January, regulators ordered the banks to identify military members and other borrowers who were evicted in violation of federal law.
The analysis, which was turned over to regulators in recent days, provides the first detailed glimpse into the extent of wrongful foreclosures amid the collapse of the housing market. While lenders previously acknowledged that they relied on faulty documents to push through foreclosures, the banks claimed borrowers were rarely evicted by mistake, including military personnel protected by federal law.
That thesis, which underpinned the government’s response to the financial crisis, helps explain why homeowners languished for years without relief. The revelations of more pervasive harm could provide fresh ammunition for Wall
The supremely confident billionaire hedge-fund manager Bill Ackman has never been afraid to bet the farm that he’s right.
In 1984, when he was a junior at Horace Greeley High School, in affluent Chappaqua, New York, he wagered his father $2,000 that he would score a perfect 800 on the verbal section of the S.A.T. The gamble was everything Ackman had saved up from his Bar Mitzvah gift money and his allowance for doing household chores. “I was a little bit of a cocky kid,” he admits, with uncharacteristic understatement.
Tall, athletic, handsome with cerulean eyes, he was the kind of hyper-ambitious kid other kids loved to hate and just the type to make a big wager with no margin for error. But on the night before the S.A.T., his father took pity on him and canceled the bet. “I would’ve lost it,” Ackman concedes. He got a 780 on the verbal and a 750 on the math. “One wrong on the verbal, three wrong on the math,” he muses. “I’m still convinced some of the questions were wrong.”
Not much has changed in the nearly 28 years since Ackman graduated from high school, except that his hair has gone prematurely silver. He still has an uncanny knack for making bold, brash pronouncements and for pissing people off. Nowhere is that more apparent than in the current, hugely public fight he and his $12 billion hedge fund, Pershing Square Capital, are waging over the Los Angeles–based company Herbalife Ltd., which sells weight-loss products and nutritional supplements using a network of independent distributors. Like Amway, Tupperware, and Avon, Herbalife is known as “a multi-level marketer,” or MLM, with no retail stores. Instead, it ships its products to outlets in 88 countries, and the centers recruit salespeople, who buy the product and then try to resell it for a profit to friends and acquaintances.
After he was fired Thursday, Andrew Mason wrote a note to his Groupon colleagues filled with the same offbeat humor, charm and candor that defined his tenure as chief executive of the daily deals company he co-founded.
"After four and a half intense and wonderful years as CEO of Groupon, I've decided that I'd like to spend more time with my family," the letter began. "Just kidding — I was fired today."
His ouster came as no surprise. Questions about his future have been swirling for months because of Groupon's poor performance since going public a little more than a year ago.
"Libya will replace the head of its sovereign wealth fund, Mohsen Derregia, after the government deemed his performance unsatisfactory, Prime Minister Ali Zeidan said, but so far he has refused to step down despite being told to do so days ago.
Speaking at a news conference on Thursday, Zeidan said deputy central bank governor Ali Mohammed Salem Hebri would temporarily take charge of the Libyan Investment Authority (LIA) until a permanent replacement was found.
"The head of the LIA will be changed. This is the government's policy. Whoever cannot do their job properly will be replaced," Zeidan said. "Up until now he has declined to step down but he needs to do that."
Zeidan said Derregia was told earlier this week he needed to step down. His comments highlight the chaotic scenes that have often come about in the new Libya where the central government has struggled to impose its authority in a country awash with weapons left over from the 2011 war that ousted Muammar Gaddafi.
Zeidan added senior LIA officials would meet in coming days to appoint a permanent replacement.
Derregia was appointed LIA chairman in April, taking charge after the uprising. He was not immediately reachable for comment. The LIA office in central Tripoli was closed ahead of the weekend.
Set up in 2006 to manage the North African country's oil dollars, Libya's sovereign wealth fund has assets of around $60 billion, mixed between shares, bonds, other financial products and holdings in subsidiaries.
Its assets were temporarily frozen during the 2011 war, and since then a new management has taken over and sought their release. The LIA has stakes in Italian bank Unicredit as well as oil and gas group Eni."