“I make money studying natural stupidity.”
Carl Icahn.
“In the takeover business, if you want a friend, you buy a dog.”
“When most investors, including the pros, all agree on something, they’re usually wrong.”
“My investment philosophy, generally, with exceptions, is to buy something when no one wants it.” Carl Icahn
The one massage that CEOs fear the most getting from their secretary: “ It’s Carl Icahn on line one”- Neil Cavuto (FOX-Business News)
Born in Queens, New York, Icahn was the son of a former opera singer who settled on being a cantor in Cedarhurst, Long Island. This self made billionaire made a fortune as an Activist Investor. Some would say his approach is too aggressive; he would argue that his involvement brought positive results for companies and shareholders. Icahn’s philosophy is built on the simple fact that all CEO’s have to be accountable to shareholders. His opinion is that the CEO must posses something more than just the ability to get along with the people. In his famous lecture at Yale University he says: “This is the problem in America today, we are basically under managed .We can’t compete because the best and the brightest don’t get to be at the top of the corporate ladder.”
Icahn’s strategy is to buy stock from a certain company, become a major shareholder and then introduce a list of demands to the board of directors. Sometimes it might be an idea to split the company or include him and his representatives as new board members, even if it means a change in the company’s policy that increases the amount of board members. For example, at the beginning of 2014, Icahn asked Tim Cook (Apple’s CEO) to launch a massive stock buy back program; as a result, stock gained 18 % . It looks like each time Mr. Icahn speaks with his wallet — CEOs have to listen. Icahn has a strong sense of responsibility for the economy in America. That’s what happens when money is not an issue anymore. Here is the list of Icahn’s successful endeavors :
In 1988 Icahn bought ACF industries-rail cars and rail car components maker. Icahn still owns the company.
Gained profit of $470 million, making TWA private in 1988. Some would say Icahn’s strategy led TWA to bankruptcy. Nevertheless, when Carl left the company, he managed to strike a deal that allowed him to buy tickets for 55 cent on the dollar. Despite that, Icahn was prohibited from selling tickets through travel agencies so he launched www.LowesFare.com and sold tickets and made a profit. This was a totally new approach for the travel industry at that time.
In 2000, he bought American Casino and Entertainment for $ 300 million, held them for 8 years and sold them in February 2008 for $ 1.3 billion right before the first strike of the recession.
In 2006 Icahn pushed to oust the CEO of Time Warner. When Carl was asked about this failed attempt, He said: “… Dick Parsons agreed to do what we wanted most -a $ 20 billion buyback of the stock. He did what he promised and the stock is up 30%. That helps shareholders. Our [hedge] fund made $ 250 million. It’s a nice way to lose.”
Sold half of his 10 percent stake in Netflix at a profit of over $800 million in less than a year — the largest stock gains ever; 400% per year. Icahn bought Netflix in October 2012 and sold it in October 2013
On August 13 2013 Icahn tweets about his huge stake in Apple and urges Tim Cook to launch a buyback program. As a result, Apple shares surge 5%. which allowed Apple stock to cross key psychological resistance level at $500.
On October 24, 2013 Icahn continues to insist on $ 150 billion share buyback program. On April 23 Apple,2014 increase buyback program to $90 billion. Stock goes up. Since Icahn’s acquisition stock gained 30%. Brokers on Wall Street named it-”Icahn’s lift”.
I.G.K
P.S. Recent Icahn’s move. Watch for Pay Pal and E-Bay:
CARL C. ICAHN RELEASES STATEMENT ON EBAY
New York, New York, September 30, 2014 – Today Carl C. Icahn released the following statement regarding this morning’s announcement by eBay Inc. of its plan to separate the company’s eBay and PayPal businesses into independent publicly traded companies: We are happy that eBay’s board and management have acted responsibly concerning the separation – perhaps a little later than they should have, but earlier than we expected. As I have said in the past and have continued to maintain, it is almost a “no brainier” that these companies should be separated to increase the value of these great assets and thus to meaningfully enhance value for all shareholders. It also continues to be my belief that the payments industry, of which PayPal is an important part, must be consolidated – either through acquisitions made by PayPal or a merger between PayPal and another strong player in the industry. It is possible that this could be accomplished through a reverse Morris Trust structure because, in light of the development of strong competition such as the advent of Apple Pay, the sooner these consolidations take place, the better. As one of the largest shareholders of eBay, I intend to have discussions in the near future with John Donahoe who, as I have said in the past and continue to believe, has the interest of enhancing value for all shareholders as his major concern.
