B. Riley analyst Linda Bolton Weiser echoed a similar tune in the wake of reports of Ackman's short trade and his Thursday presentation.

"When short seller Barry Minkow attacked Herbalife in a Nov. 2007 report, the stock dropped 11% on one day, then proceeded to rise to a new high in April 2008," the analyst wrote. " Herbalife did take legal action against Barry Minkow and later settled with him," adds Bolton Weiser.

While Herbalife CEO Johnson said on CNBC the SEC should look into Ackman's short presentation, there's no public indication of any legal action brought by the company as of yet. In a Bloomberg Television interview, Ackman said he would welcome a lawsuit.

Other's weren't just content to compare Ackman's short trade to that of Minkow, who's been convicted, in separate prison sentences, for running a Ponzi-scheme and for market manipulation.

"We are certain that regulators will review the Pershing Square materials closely but we are highly skeptical that Ackman has exposed anything that is remotely close to a smoking gun," writes D.A. Davidson analyst Timothy Ramey, while noting that many details from Ackman's presentation dated as far back as 2000. Meanwhile, Ramey took a personal tone to Ackman's critique of Herbalife's products.

"Ackman dismisses, at his own peril, the fact that Herbalife is a premium product that is consumed daily by a very loyal and growing population of people who are concerned about diet and healthy living. They may not look like the people Mr. Ackman knows in Chappaqua, but they are out there, and in growing numbers; weight loss is becoming a growing industry," writes the analyst, who maintains a 'Buy' rating and $72 price target.

On a more fundamental basis, Bank of America Merrill Lynch analyst Christopher Ferrara and Bolton Weiser of R. Riley argue Herbalife has the financial flexability to launch a large stock buyback, which might drive earnings per share growth. Ferrara, for instance, highlights that Herbalife is authorized to repurchase $1 billion in stock, or roughly 24% of the company's shares outstanding, in a Dec. 21 note to clients.

Clearly, in squaring off in public presentations, Herbalife CEO Johnson and Pershing Square's Ackman are putting their reputations on the line. It's also clear that the Wall Street analysts like Ramey of D.A. Davidson should be held accountable for their buy ratings and straw man logic, once the dust settles on Ackman's trade.

-- Written by Antoine Gara in New York

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