Carl Icahn

King Icahn: The Biography of a Renegade Capitalist
by Mark Stevens
Published 31 May 1993

In retrospect, Phillips was a watershed deal, for both the evolution of Carl Icahn and the M&A craze that defined the decade. “Before Phillips, Carl Icahn was just Carl Icahn—a successful takeover guy with brass balls and a pretty good record for getting things done,” said the former Drexel managing director. “But after Phillips, Carl became the Carl Icahn. The deal firmly established his image as the best intimidator, the best takeover practitioner around. “Think about it this way. For Pickens, a creature of the oil patch, to launch an assault on Phillips was audacious. But for Carl Icahn, this Wall Street operative who’d never even seen an oil well and who had no ties to the business establishment, to attack Phillips, that was unholy, incredible, awesome.

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The man, who for all outward appearances and statements didn’t care a whit what others thought of him, was genuinely interested in having a biography of his life produced by an independent writer and read by the world. I believe this rush of vanity surprised no one more than Carl Icahn himself. A final note: there are many qualities about this germaphobic, detached, relatively loveless man but he is by far the smartest person I have ever had the pleasure of knowing in my life. This book chronicles it all. THE BILLION DOLLAR EPIPHANY “I was once the rich uncle. Now he’s the rich nephew.” —Elliot Schnall In the summer of 1979, Carl Icahn, then a relatively obscure Wall Street figure with a hole-in-the-wall brokerage firm and a knack for making money in the options business, traveled to Miami to visit his mother Bella and his uncle, Elliot Schnall.

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Icahn had detected a weak link in the capitalist system, and he would exploit it with enormous success over the course of a tumultuous decade in American business. FIRST STRIKES: CONTROLLING THE DESTINY OF COMPANIES “In a fight, I go over a certain line and I become very tough. I even surprise myself. I reach a certain point in a fight where there is no turning back.” —Carl Icahn By 1977, Carl Icahn was ready to move out of the shadows and onto Wall Street’s center stage. Two decades of thinking and observing had come together in a cohesive vision. He would make his mark, and his fortune, by controlling “the destinies of companies”—a feat he would accomplish not with brute force or financial might (neither of which he possessed at the time), but instead by putting a new spin on a time-tested Wall Street battle tactic, the proxy contest.

Dear Chairman: Boardroom Battles and the Rise of Shareholder Activism
by Jeff Gramm
Published 23 Feb 2016

WARREN BUFFETT AND AMERICAN EXPRESS Warren Buffett letter to President and CEO Howard Clark, June 16, 1964 The Great Salad Oil Swindle nearly topples American Express and sparks a minor revolt among its shareholders. Warren Buffett’s investment in the company marks a turning point in his career. CARL ICAHN AND PHILLIPS PETROLEUM Carl Icahn letter to Chairman and CEO William Douce, February 4, 1985 After a brief interlude covering Jim Ling, Harold Simmons, and Saul Steinberg, we enter the corporate raider era to watch Carl Icahn’s Milken-funded frontal assault on hapless Phillips Petroleum. ROSS PEROT AND GENERAL MOTORS Ross Perot letter to Chairman and CEO Roger Smith, October 23, 1985 Pushed to the brink by poison pills and greenmail, institutional investors finally lose their cool when General Motors pays its largest shareholder, and one of the world’s greatest businessmen, to quit the board of directors.

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With help from the efficient market hypothesis and the free market movement of the 1970s, raiders were viewed less as a scourge and threat to industry and more as a disciplinary force. In the ’80s, the hostile raiders rode strong economic growth and Michael Milken’s blank checkbook to fame and riches. 4 Carl Icahn versus Phillips Petroleum: The Rise and Fall of the Corporate Raiders “However, what I strenuously oppose is the Board not allowing the shareholders to receive a fair price for all their shares.” —CARL ICAHN, 1985 ON FEBRUARY 4, 1985, Carl Icahn sent a letter to William Douce, chairman and CEO of Phillips Petroleum, offering to buy the company. He wrote that if Phillips did not accept his bid, he would launch a hostile tender offer for control.

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More than any of the other raiders’, Carl Icahn’s career in the 1980s exemplified the decade. He had an unlikely ascent followed by a crash that almost left him ruined. Yet today he is the best known of the corporate raiders. And, to use the metric that probably matters most to him, he is also the richest. Early in his career, Icahn was dismissed as a simple “greenmailer,” someone who would agitate at a company only to win a preferential buyout of his shares. But his tussle with Phillips showed him at his instinctive and gunslinging best. As a former Drexel managing director described it, “Carl Icahn became the Carl Icahn.”12 The deal also showcased the awesome power of Milken and Drexel, and by doing so, numbered the days for both.

When the Wolves Bite: Two Billionaires, One Company, and an Epic Wall Street Battle
by Scott Wapner
Published 23 Apr 2018

James Sterngold, “The Pawns Differ: Icahn Still Winning,” New York Times, February 6, 1985. 10. Tobias Carlisle, “How Carl Icahn Became a Corporate Raider,” Investment News, December 7, 2014. 11. Tobias Carlisle, “The Insight That Enabled Carl Icahn to Become a Corporate Raider,” Crain’s Wealth, December 8, 2014. 12. Carlisle, “How Carl Icahn Became a Corporate Raider.” 13. Paul Richter, “Carl Icahn Relishes His Raider Role,” Los Angeles Times, June 9, 1985. 14. Slater, The Titans of Takeover. 15. Ibid. 16. Ibid. 17. Ibid. 18. Ibid. 19. Carlisle, “How Carl Icahn Became a Corporate Raider.” 20. Robert Cole, “Icahn Makes Dual Offer for Dan River,” New York Times, October 26, 1982. 21.

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Kevin McCoy and Nathan Bomey, “Herbalife Agrees to $200M FTC Settlement,” USA Today, July 15, 2016. 27. Carl Icahn, “Carl Icahn Issues Statement in Response to Herbalife’s Settlement with the FTC,” carlicahn.com, July 15, 2016. 28. Lindsay Rittenhouse, “Herbalife Settlement Is Profound Victory,” The Street, July 15, 2016. Chapter 15: Finale or Fakeout? 1. Michelle Celarier, “Inside Wall Street’s Greatest Feud,” Fortune, September 19, 2016. 2. Ibid. 3. Ibid. 4. David Benoit, “Carl Icahn Mulled Selling Herbalife Stake to Group That Included Bill Ackman,” Wall Street Journal, August 26, 2016. 5. CNBC, Squawk Box, August 26, 2016. 6. Carl Icahn, “Carl Icahn Issues Statement Regarding Herbalife,” carlicahn.com, August 26, 2016. 7.

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Slater, The Titans of Takeover. 22. Richter, “Carl Icahn Relishes His Raider Role.” 23. Robert Cole, “ACF, Icahn Target, Prepares Next Step,” New York Times, September 20, 1983. 24. Ibid. 25. Linette Lopez, “Carl Icahn Told an Amazing 8-Minute Story That Explains His Entire Philosphy About Activist Investing,” Business Insider, November 4, 2015. 26. Times Wire Services, “Chesebrough Will Buy Stauffer for $1.2 Billion,” Los Angeles Times, February 20, 1985. 27. Robert J. Cole, “Icahn Bids $8.1 Billion for Phillips,” New York Times, February 6, 1985. 28. Ibid. 29. William Gruber, “Raider Carl Icahn—A Pirate or Patriot?”

Deep Value
by Tobias E. Carlisle
Published 19 Aug 2014

Available at http://dealbook.nytimes.com/2010/06/03/ another-view-can-biotech-survive-icahn/?ref=business. Bertoni, March 9, 2011. Carl Icahn, Schedule 14A Filing, February 23, 2010: http://www.sec.gov/ Archives/edgar/data/732485/000091062710000037/dfan14a022210.txt. Icahn Capital LP SEC Form 13F March 31, 2010 Available at http://www.sec. gov/Archives/edgar/data/1412093/000114036110021805/form13fhr.txt. Ibid. Howard Anderson. “Carl Icahn’s Battle to Take Down Genzyme.” The Boston Globe, June 2, 2010. Available at http://www.boston.com/bostonglobe/ editorial_opinion/oped/articles/2010/06/02/carl_icahns_battle_to_take_ down_genzyme. Icahn Capital LP SEC Schedule 14A Filing Available at http://www.sec.gov/ Archives/edgar/data/732485/000091062710000101/genzdfan14a060110.txt.

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“iPrefs: Unlocking Value.” Greenlight Capital, 2013. Available at https://www.greenlightcapital.com/905284.pdf. 17. Ibid. 18. Ibid. 19. Carl Icahn, “Letter to Tim Cook.” Icahn Enterprises, October 8, 2013. Available at http://www.scribd.com/doc/178753981/Carl-Icahn-s-Letter-To-Apple-s-Tim-Cook. 20. Einhorn, 2013. 21. David Benoit. “Icahn Ends Apple Push With Hefty Paper Profit.” The Wall Street Journal, February 10, 2014. Applied Deep Value 215 22. Steven Russolillo. “Carl Icahn: ‘Agree Completely’ With Apple’s Bigger Buyback.” The Wall Street Journal, April 23, 2014. 23. Benoit, 2014. 24. Benjamin Graham and David Dodd.

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Each chapter tells a different story about a characteristic of deep value investing, seeking to illustrate a genuinely counterintuitive insight. Through these stories, it explores several ideas demonstrating that deeply undervalued stocks provide an enormous tail wind to investors, generating outsized returns whether they are subject to activist attention or not. We begin with former arbitrageur and option trader Carl Icahn. An avowed Graham-and-Dodd investor, Icahn understood early the advantage of owning equities as apparently appetizing as poison. He took Benjamin Graham’s investment philosophy and used it to pursue deeply undervalued positions offering asymmetric returns where he could control his own destiny.

The Predators' Ball: The Inside Story of Drexel Burnham and the Rise of the JunkBond Raiders
by Connie Bruck
Published 1 Jun 1989

The junk-bond-financed takeover had not sprung, fully functioning, from the minds of Milken and his Drexel colleagues; it had needed crafting and fine-tuning. T. Boone Pickens Jr.’s peanut-sized Mesa Petroleum had made a run at mammoth Gulf Oil in early 1984. Pickens had ultimately driven Gulf into the arms of its white knight, Standard Oil of California. Then Steinberg’s Reliance had mounted its raid against Disney. Carl Icahn had launched his bid for Phillips Petroleum, after Pickens’ Mesa had taken its turn and been bought out. These raids—all financed by Drexel junk bonds, except for Pickens’ run at Phillips—had thrown off hundreds of millions of dollars to the raiders and to Drexel. But not one had acquired its target.

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It must have not only excited but tickled the fancy of Milken, an amateur magician who occasionally does tricks for his friends, to be able to wave this particular wand. The honored guests of this conference, therefore, were the takeover artists and their biggest backers—men like T. Boone Pickens, Carl Icahn, Irwin Jacobs, Sir James Goldsmith, Oscar Wyatt, Saul Steinberg, Ivan Boesky, Carl Lindner, the Belzbergs—and lesser lights about to shine, such as Nelson Peltz, Ronald Perelman, William Farley. The names tend to meld into a kind of raiders’ litany, but they are not all the same. For Milken, they would have separate roles during the coming months, performing discrete functions in a vast, interlocking machine of which he alone would know all the parts.

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It was a glorified road show for the buyers and for the scores of companies that made presentations, many of whom would soon be doing junk-bond offerings. It was a reunion for Milken’s high-rollers, whose camaraderie, if not collusion, he encouraged. One Drexel lawyer later recalled having seen Ivan Boesky, Carl Icahn, Carl Lindner and Irwin Jacobs huddled in a corner. “Anything could have been happening there,” he remarked with a laugh. It was a good time. Bungalow 8 would not soon be forgotten, and client loyalty gets forged in sundry ways. And it launched Milken’s now full-blown tour de force. Within the first two weeks of April 1985, hard on the heels of the Predators’ Ball, five more Drexel clients—in addition to Triangle Industries—would make bids for companies, all backed by Milken’s junk bonds.

The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market
by Tobias E. Carlisle
Published 13 Oct 2017

Available at https://www.sec.gov/Archives/edgar/data/1040273/000089914000000393/0000899140-00-000393-0003.txt 59 David Einhorn. “iPrefs: Unlocking Value.” Greenlight Capital, 2013. Available at https://www.greenlightcapital.com/905284.pdf. 60 David Einhorn. “iPrefs: Unlocking Value.” Greenlight Capital, 2013. Available at https://www.greenlightcapital.com/905284.pdf. 61 Carl Icahn, Letter to Tim Cook. Available at https://www.cnbc.com/2013/10/24/carl-icahns-letter-to-tim-cook.html 62 Carl C Icahn, Tweet, 11:21 AM, August 14, 2013. Available at https://twitter.com/Carl_C_Icahn/statuses/367350206993399808 63 David Einhorn. “iPrefs: Unlocking Value.” Greenlight Capital, 2013. Available at https://www.greenlightcapital.com/905284.pdf. 64 Carl C Icahn, Tweet, 11:12 AM, 11:13 AM, August 19, 2014.

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Buffett wrote in 1984, “It is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately to people or it doesn’t take at all”:1 A fellow…who had no formal education in business, understands immediately the value approach to investing and he’s applying it five minutes later. In the book, I set out the data and my reasoning. We’ll look at the details of actual stock picks by billionaire deep-value investors: •Warren Buffett •Carl Icahn •Daniel Loeb •David Einhorn We’ll see the strategies of Buffett and his teacher, Benjamin Graham, and other contrarians, including: •billionaire trader Paul Tudor-Jones •venture capitalist billionaire Peter Thiele •global macroinvestor billionaire Michael Steinhardt •billionaire tail-risk hedger Mark Spitznagel I wrote this book so you can read it in a couple of hours.

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But they only do it when the stock is deeply undervalued. Billionaire value-investor Warren Buffett famously says he tries to be “fearful when others are greedy, and greedy when others are fearful.” Said in other words, Buffett zigs when the crowd zags. Like Buffett, billionaire corporate-raider Carl Icahn is also a value investor. He has been called the “the contrarian to end all contrarians.”2 Ken Moelis, former chief of investment banking at UBS, said of Icahn, “He’ll buy at the worst possible moment, when there’s no reason to see a sunny side and no one agrees with him.”3 Icahn explains why:4 The consensus thinking is generally wrong.

The System: Who Rigged It, How We Fix It
by Robert B. Reich
Published 24 Mar 2020

Their successes earned them billions of dollars and laid the groundwork for the next round of exploitation. In order to unravel the nexus of wealth and power at the top, these systemic changes must be reversed. CHAPTER 8 From Stakeholder to Shareholder Capitalism JAMIE DIMON wanted to be President Trump’s Treasury secretary, according to several sources. But billionaire investor Carl Icahn preferred Steven Mnuchin for the job. Mnuchin got it. How did Icahn get his pick? Icahn endorsed Trump for president in September 2015, barely three months after Trump announced his candidacy and long before he was considered a serious contender. “He’s the only candidate that speaks out about the country’s problems,” Icahn explained at the time.

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In 1980, under pressure from financial entrepreneurs like Weill, Congress lifted that ban, and Weill quickly got to work merging banks. A related Depression-era rule erected a strict wall between commercial banking (collecting deposits and making loans) and investment banking (making bets), called the Glass-Steagall Act. By the mid-1980s, as the stock market took off courtesy of Carl Icahn and the other raiders, people like Weill and Dimon noted that huge money could be made by taking down that wall. In early 1985, three of the Street’s biggest banks—JPMorgan, Citicorp, and Bankers Trust—asked the Federal Reserve Board to remove a few bricks. As a member of JPMorgan’s board at the time, Alan Greenspan endorsed the company’s application.

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The three systemic changes I have outlined—from stakeholder to shareholder capitalism, from unionized workers to corporate monopolies, and from regulation of Wall Street to letting the Street run wild—profoundly altered the American system. It created a jaw-droppingly wealthy and powerful oligarchy. It shafted just about everyone else. CHAPTER 11 The Triumph of the Oligarchy DIG UNDER THE SURFACE of the system and you see individuals making deals that generated billions for themselves—such as Carl Icahn’s corporate raids, Jack Welch’s attacks on GE’s workers and unions, Warren Buffet’s investments in corporations with moats, and Sandy Weill’s and Jamie Dimon’s unfettered financial supermarkets and betting parlors. Dig deeper and you see how these deals depended on seemingly small changes in laws and regulations, such as preventing companies from defending themselves from raiders, neutering antitrust enforcement, imposing small fines on corporations for firing union organizers, refusing to regulate derivatives, and dismantling Glass-Steagall.

MONEY Master the Game: 7 Simple Steps to Financial Freedom
by Tony Robbins
Published 18 Nov 2014

You’ll gain insight into how they became the titleholders in the field of finance, and how you too have to stay alert and be ready for anything that happens. You’ll learn investment strategies that will prepare you for all seasons, for times of inflation and deflation, of war and peace, and, as Jack Bogle puts it, “times of sorrow and joy.” CHAPTER 6.1 CARL ICAHN: MASTER OF THE UNIVERSE * * * The Most Feared Man on Wall Street Question: When is a single tweet worth $17 billion? Answer: When Carl Icahn says Apple is undervalued and announces he’s buying the stock. Within an hour of Icahn’s tweet in the summer of 2013, Apple stock had jumped 19 points. The market got the message: whenever the billionaire businessman takes an interest in a company, it’s time to buy.

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Icahn’s business skills have made him one of the richest men in the world—at last check of the Forbes list, he was 27th, with a net worth of more than $23 billion—and he’s made billions more for ordinary shareholders who invest in his diversified holding company, Icahn Enterprises LP (NASDAQ: IEP), or own stock in the companies he targets. The secret to his success? Even his critics will tell you Carl Icahn doesn’t just look for opportunities in business—he makes them. But most outsiders still think of him as a Wall Street caricature, a ruthless vulture capitalist who pillages companies for personal gain. When you Google the term corporate raider, Icahn’s name autofills in the search bar. But Carl Icahn is challenging that creaky old stereotype. Icahn thinks of himself as a “shareholder activist.” What does that mean? “We go in and shine a light on public companies that are not giving shareholders the value they deserve,” he told me.

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Buffett responded that he had abstained from the vote but was opposed to the plan, and that he had been quietly talking to management about reducing its excessive pay proposal—but he didn’t want to “go to war” with Coke over the issue. In contrast, Carl Icahn is always ready for war. He’s been in the trenches many times before, making runs on companies as diverse as US Steel, Clorox, eBay, Dell, and Yahoo. But this time was different: instead of Icahn, a younger fund manager named David Winters was buying stock and leading the charge against Coke’s management. To the dismay of overpaid CEOs everywhere, a new generation of “activist investors” is taking up the fight Icahn started decades ago. Naturally, Carl Icahn has ticked off a lot of corporate dynamos, enemies with big clout in the media.

The Founders: The Story of Paypal and the Entrepreneurs Who Shaped Silicon Valley
by Jimmy Soni
Published 22 Feb 2022

“Regarding Mr. Icahn’s”: “eBay Inc.’s Statement on Carl Icahn’s Investment and Related Proposals,” January 22, 2014, https://www.ebayinc.com/stories/news/ebay-incs-statement-carl-icahns-investment-and-related-proposals/. “The complete disregard”: Maureen Farrell, “Carl Icahn Charges eBay’s Board with ‘Complete Disregard for Accountability,’ ” Wall Street Journal, February 24, 2014, https://blogs.wsj.com/moneybeat/2014/02/24/carl-icahn-charges-ebays-board-with-complete-disregard-for-accountability/. “dead wrong”: “Stick to the Facts, Carl: eBay Inc. Responds to Carl Icahn,” February 26, 2014, https://www.ebayinc.com/stories/news/stick-facts-carl-ebay-inc-responds-carl-icahn/.

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Responds to Carl Icahn,” February 26, 2014, https://www.ebayinc.com/stories/news/stick-facts-carl-ebay-inc-responds-carl-icahn/. “PayPal is a jewel”… “in the world”: Steven Bertoni, “Carl Icahn Attacks eBay, Marc Andreessen and Scott Cook in Shareholder Letter,” Forbes, accessed July 29, 2021, https://www.forbes.com/sites/stevenbertoni/2014/02/24/carl-icahn-attacks-ebay-marc-andreessen-and-scott-cook-in-shareholder-letter/. “A thorough strategic”: “eBay Inc. to Separate eBay and PayPal Into Independent Publicly Traded Companies in 2015,” September 30, 2014, https://www.businesswire.com/news/home/20140930005527/en/eBay-Inc.-to-Separate-eBay-and-PayPal-Into-Independent-Publicly-Traded-Companies-in-2015.

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In a 2002 talk at Stanford, a questioner asked Thiel what advice he had for PayPal. “The larger market is off eBay,” he said, “and they should develop a lot of product features and functionalities that enable point-to-point payments in a non-eBay context.” The PayPal independence movement picked up steam, thanks to activist investor Carl Icahn. In 2013, Icahn took a significant stake in eBay and began to push it to spin off PayPal. In its January 2014 quarterly report, eBay responded: “Regarding Mr. Icahn’s separation proposal, eBay’s Board of Directors… does not believe that breaking up the company is the best way to maximize shareholder value.”

Netflixed: The Epic Battle for America's Eyeballs
by Gina Keating
Published 10 Oct 2012

Craft Blockbuster Online, vice president of strategic planning Rick Ellis Blockbuster Online, operations consultant Shane Evangelist Blockbuster Online, senior vice president and general manager Gary Fernandes Board member Bill Fields Chairman/chief executive before Antioco Sarah Gustafson Blockbuster Online, senior director, customer analytics Jules Haimovitz Board member Lillian Hessel Blockbuster Online, vice president, customer marketing Jim Keyes Chairman/chief executive Karen Raskopf Corporate Communications, senior vice president, Nick Shepherd Chief operating officer Michael Siftar Blockbuster Online, director, applications development Nigel Travis President Strauss Zelnick Board member Larry Zine Chief financial officer COSTARS (ALPHABETICAL) Robert Bell AT&T Laboratory, Statistics Division, researcher Jeff Bezos Amazon.com founder/chief executive Martin Chabbert Netflix Prize winner, ­French-­Canadian programmer Tom Dooley Viacom, senior vice president Roger Enrico PepsiCo, chairman John Fleming Walmart, chief executive Brett Icahn Carl Icahn’s son Carl Icahn Blockbuster investor/board member Michael Jahrer Netflix Prize winner, Big Chaos team, machine learning researcher Mike Kaltschnee HackingNetflix, founder/blogger Gregg Kaplan Redbox, chief executive Mel Karmazin Viacom, chief operating officer Yehuda Koren Netflix Prize winner, AT&T Laboratory, scientist Warren Lieberfarb Warner Home Video, president Joe Malugen Movie Gallery, chairman/chief executive Dave Novak Yum!

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Wattles, however, would not turn over the information to Antioco unless his rival agreed not to tender an offer directly to Hollywood Video’s shareholders. Wattles said publicly that he welcomed the offer, but he privately expressed doubts to the Blockbuster executives that U.S. antitrust regulators would approve the deal. The proposal had drawn the attention of billionaire investor Carl Icahn, a former corporate raider and self-styled shareholder activist, who then planned to profit on both ends of the Blockbuster–Hollywood Video merger. Icahn sank $150 million into Blockbuster shares and about $60 million into Hollywood Video. In a securities filing Icahn said he might seek to participate in, and influence the outcome of, any proxy solicitation and the bidding process involving the owner of the Hollywood Video stores.

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“They are still pretty small, so in the background, but have good significant potential over the next three years, mostly to negatively impact stores, which of course has a positive effect for us,” Hastings said. That summer, everyone at Netflix was exhausted and becoming demoralized. Hastings carried himself like a depleted man, and it was clear that Kilgore was very, very worried. CHAPTER THIRTEEN THE GREAT ESCAPE (2007–2009) LATER, CARL ICAHN WOULD REFLECT that John Antioco had, in fact, done a good job in setting up Total Access, and that if Antioco had not left the company in a huff over his bonus, things might have turned out differently. But in the summer of 2007, Icahn could hardly wait to get rid of Antioco. In his view, Antioco never cared as much about Blockbuster as he did about making money and escaping to his ranch to drink tequila.

All the Money in the World
by Peter W. Bernstein
Published 17 Dec 2008

Then, in 1984, Milken began using: Burrough and Helyar, Barbarians at the Gate, p. 141. 21. Black famously conceived: Jerry Useem, “20 That Made History,” Fortune, June 27, 2005, as well as interview with Black. 22. Carl Icahn, for example: Information about Marshall Field’s comes from Charles Geisst, Wall Street: A History (New York: Oxford University Press, 1997), p. 339; information about Carl Icahn and Texaco is from Roy C. Smith, The Wealth Creators: The Rise of Today’s Rich and Super-Rich (New York: St. Martin’s Press, 2001), p. 107. 23. Not all of his deals: Geisst, Wall Street, p. 340. By 2006, Icahn’s fortune had ballooned to $9.7 billion. 24.

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Much of the 1980s bull market is attributed to the Milken machine that bought and sold junk bonds for corporate takeovers. Without the hundreds of billions of dollars in these low-grade bonds that he and Drexel raised, the takeover boom might have been far smaller, and his raider clients such as Ronald Perelman, T. Boone Pickens, and Carl Icahn might never have landed on the Forbes 400. “There was fear everywhere,” remembers Leon Black, cohead of corporate finance at Drexel in the 1980s and now head of a major New York private equity firm (and number 160 on the Forbes 400 in 2006). “Every CEO was worried. They’d read the Wall Street Journal in the morning and learn that their company was under attack by some guy we’d financed for $10 billion that morning.

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They’d read the Wall Street Journal in the morning and learn that their company was under attack by some guy we’d financed for $10 billion that morning. Nobody felt safe.” Black famously conceived21 the “highly confident” letter that Drexel gave raiders, essentially a pirate flag that told takeover targets the fearsome bank was backing them. Carl Icahn, for example22, a secretive former Wall Street stock arbitrageur and fiendish poker player, came out of nowhere to earn over $100 million from hostile purchases of stock in companies like Marshall Field’s and over $500 million from Texaco, whose corporate boards paid him to go away—the greenmailing strategy.

Makers and Takers: The Rise of Finance and the Fall of American Business
by Rana Foroohar
Published 16 May 2016

Six out of the top ten fastest-growing job categories pay $15 an hour and workforce participation is as low as it’s been since the late 1970s.4 It used to be that as the fortunes of American companies improved, the fortunes of the average American rose, too. But now something has broken that relationship. That something is Wall Street. Just consider that only weeks after Apple announced it would pay off investors with the $17 billion, more sharks began circling. Corporate raider Carl Icahn, one of the original barbarians at the gate who attacked companies from TWA to RJR Nabisco in the 1980s and 1990s, promptly began buying up Apple stock, all the while tweeting demands that Cook spend billions and billions more on buybacks. With each tweet, Apple’s share price jumped. By May 2015, Icahn’s stake in Apple had soared 330 percent, to more than $6.5 billion, and Apple had pledged to spend a total of $200 billion on dividends and buybacks through March 2017.

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Chapter 3 will delve deeply into the history of US business education and examine how and why it came to focus on balance sheet manipulation to the exclusion of real managerial skills. Chapter 4 will deconstruct our conventional wisdom around shareholder value by looking at how activist investors like Carl Icahn now call the shots at the country’s largest and most successful firms—such as Apple—at the expense of innovation and job creation. Chapter 5 will show how much of corporate America has come to emulate banking—how we’re all glorified bankers now—by tracking the history of General Electric, which is one of the great American innovators, but which became the country’s fifth-largest bank before trying to reclaim its roots in industry.

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Indeed, “shareholder value” has become the rallying cry of many a financially oriented manager making decisions that boost a company’s share price at the expense of longer-term growth. And it has also become the justification for “activist” investors who, in a clever semantic trick, have today been rebranded from their previous incarnation as “corporate raiders”—people like Carl Icahn, Bill Ackman, and Daniel Loeb, who have pushed American companies to pay back their record $2 trillion cash hoard in the form of dividends and share buybacks, rather than pay higher wages or make investments in factories, infrastructure, or worker training.17 And they’ve been quite successful at forcing companies to do just that.

100 Baggers: Stocks That Return 100-To-1 and How to Find Them
by Christopher W Mayer
Published 21 May 2018

And you can see that. There are so many articles out there right now about how companies are hoarding cash at such a high level. The owner-operators are nothing if not opportunistic. We talked about a few examples, such as Carl Icahn, the famous dealmaker. There are a variety of Icahn-led companies in the index. American Railcar, CVR Energy and Chesapeake are three. “When you study somebody like Carl Icahn,” Matt said, “it becomes very clear that he’s using these companies like chess pieces.” Let’s just look at American Railcar and CVR Energy, for instance. In the oil-rich Bakken, there was a shortage of pipeline capacity to get it to the refineries, such as CVR.

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— Martin Sosnoff, Silent Investor, Silent Loser OWNER-OPERATORS: SKIN IN THE GAME 87 “When my mother asked me what I was doing these days, I explained it to her this way,” Matt Houk told me. “I said, ‘OK, Mom, what if Warren Buffett approached you and said he’d manage your money [for a small fee]—would you let him?’ “‘Of course.’ “‘What about Carl Icahn?’ “‘Yes.’ “‘What about Bill Ackman, David Einhorn or the Tisch family at Loews? Would you let them do it for that fee?’ “‘Yes, absolutely.’ “And that’s what this fund is. People manage your money for a very reasonable fee and you get access to private equity-type talent. “Odd that there wasn’t a product like this before,” Matt explained.

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OWNER-OPERATORS: SKIN IN THE GAME 91 “For the average person,” Matt summed up, “getting access to investors of that quality is not easy. You can get it only if you go through a hedge fund or a private equity partnership. And you need to be at a high standard of living to qualify. But this is an indirect way to access that talent. And you can have Nelson Peltz invest your money. You can have Carl Icahn and Warren Buffett.” Wealth begets wealth “Most wealth remains hidden in private financial arrangements undetected by curious onlookers,” write Professors Joel Shulman and Erik Noyes. “The public will probably never know the secrets behind this money.” But not all such wealth lies hidden. As we saw with Matt Houk, some of the world’s wealthiest own and operate public companies.

Palace Coup: The Billionaire Brawl Over the Bankrupt Caesars Gaming Empire
by Sujeet Indap and Max Frumes
Published 16 Mar 2021

“TPG Capital, Apollo sell remaining stake in Caesars,” Las Vegas Review-Journal, March 12, 2019. Caesars Entertainment Corporation, Robert Morse resignation, 8-K, Nov 26, 2018. Vardi, Nathan. “How Carl Icahn Made $1.4 Billion Playing The Booms And Busts Of Las Vegas.” Forbes, August 30, 2017. Indap, Sujeet. “US casinos unlock the value in their real estate.” Financial Times, July 18, 2019. Lombardo, Cara. “Carl Icahn All But Exits Casinos With Tropicana Entertainment Sale.” Wall Street Journal, April 16, 2018. CNBC Power Lunch. “Caesars Entertainment CEO on plummeting stock price.” Mark Frissora on CNBC, August 1, 2018.

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The party made news highlights and Loveman, wounded by Bonderman’s decision, would be asked for years about why exactly the TPG founder did not choose the casino he owned. A PARTY AT THE MUSEUM of Modern Art proved more problematic for Leon Black and Apollo. On the evening of May 15, 2007, the crowd included New York heavyweights such as Mayor Mike Bloomberg, Henry and Marie-Josée Kravis, Caroline Kennedy, Carl Icahn, Barry Diller and his wife Diane Von Furstenberg, and Vera Wang. The MoMA was hosting its annual black-tie “Party in the Garden” fundraiser, and the evening’s honorees were Leon and Debra Black and Martin Scorsese. The entertainment would be provided by Jay-Z, who, like Black, was a native New Yorker.

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Apollo was having a difficult time finding candidates for the top spot, and Frissora would have had a hard time finding any job at any other public company. In September 2014, he had left as CEO at Hertz Global citing “personal reasons.” In fact, Hertz was in the middle of a massive accounting scandal where the rental car and equipment company was facing accusations of inflating profits. Carl Icahn had taken a near 10 percent stake and was making noise. Another hedge fund said Frissora had “lost all credibility.” To his surprise, Frissora got a call from an executive search firm just two weeks after leaving Hertz. They asked if he had interest in the Caesars job. He met with Rowan, Sambur, and Bonderman.

Dead Companies Walking
by Scott Fearon
Published 10 Nov 2014

All kidding aside, it’s hard to believe that in the age of mobile communication and content delivery that the company’s management believed something as old-fashioned as home phones would reverse its slide. Candy sales almost seemed more promising by comparison. Even though I shorted the stocks of three other public video rental chains that wound up going bankrupt, I never shorted Blockbuster. You could say I got “cahned.” A few years before my visit with Angelika, renowned investor Carl Icahn had become the biggest shareholder in Blockbuster and had won a proxy war to control its board of directors. I respected Icahn’s acumen, or at least his clout, enough to stay away from shorting Blockbuster while he was so deeply involved. Even if the new retail scheme was as doomed as I thought, I didn’t want to be on the wrong side of such a powerful figure.

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But without late fees and per-movie charges, it was never going to be profitable for the company—not with the burden of thousands of store leases and tens of thousands of employee salaries to pay. But instead of closing as many stores as they could to cut costs and putting everything they could into its online presence, Blockbuster’s leadership went backward and decided to turn its stores into glorified candy racks. I am definitely not trying to bash Carl Icahn. I have a lot of respect for him. But as he has admitted, he blew it big time at Blockbuster. The only way it was going to survive was by adapting to the fact that people weren’t going to get in their cars and drive several miles to a store just so they could overpay to rent movies anymore. Instead, he wagered that people would continue to drive several miles to overpay for movie rentals if they could also buy candy and magazines and video games—or maybe a cheap flat-screen TV—at the same time.

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There’s no other way to put it: the man was imposing. Leaning back in his leather chair with the skyline of Houston spread out behind him, he looked like the perfect embodiment of the 1980s corporate raider—which, in many ways, he was. A few years after our meeting, he waged a storied takeover battle for Eastern Airlines with none other than Carl Icahn. Several scale models of DC-10s were displayed around his office. One of these was painted in Continental’s colors, another had the now-defunct Texas International Air brand on the side of it, and a third had been decorated with the name and logo of Jet Capital, the holding company Lorenzo and a fellow Harvard MBA had started in the late 1960s.

Den of Thieves
by James B. Stewart
Published 14 Oct 1991

Tomilson Hill III, co-head of M&A Steve Waters, co-head of M&A Peter Solomon, investment banker At Bank Leu, Nassau, the Bahamas Bernhard Meier, banker Bruno Pletscher, banker Cast of Characters U At Merrill Lynch & Co., New York Stephen Hammerman, general counsel Richard Drew, vice president, compliance Major investors Carl Icahn, corporate raider and future chairman of TWA John Mulheren, head of Jamie Securities Henry Kravis, principal, Kohlberg Kravis Roberts Inc. At Wachtell, Lipton, Rosen & Katz, New York (counsel for Goldman, Sachs) Martin Lipton, partner Ilan Reich, partner Lawrence Pedowitz, partner At Paul, Weiss, Rifkind, Wharton & Garrison, New York (counsel for Michael Milken and Dennis Levine) Arthur Liman, partner Martin Flumenbaum, partner At Williams & Connolly, Washington, D.C.

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Boesky claimed he had no interest in the unsavory practice of "greenmail," in which a large, hostile stake is accumulated in a company hoping to scare management into buying out the raider at a premium price. Conway signed on; he was intrigued at the thought of working for someone who might turn into the next Boone Pickens or Carl Icahn. His colleagues at Drexel were pleased: Conway could be counted on to steer business to his former employer. Indeed, to put his ambitious plans into eflFect, Boesky needed much more capital—and Drexel seemed the perfect source for it. The capital base in his arbitrage operation, always smaller than he had hoped for, had been decimated by the Cities Service crisis; he wasn't even financing his routine arbitrage activity on the scale he had wanted.

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Considine frantically tried to put together his own financing for a leveraged buyout, but it was really no contest. Milken simply shopped National Can to his other loyal clients, oflFering them the chance to seize the company in Posner's stead, sure that they would top any bid Considine could muster. Carl Icahn eyed National Can seriously, even taking a large position, but eventually demurred. Ultimately another Milken protege, Nelson Peltz, bought the company. Drexel, raising a total of $595 million for Peltz, made even more in financing and investment banking fees than it would have had Posner carried through with the original plan.

Hiding in Plain Sight: The Invention of Donald Trump and the Erosion of America
by Sarah Kendzior
Published 6 Apr 2020

When John Carpenter filmed his 1981 postapocalyptic thriller Escape from New York—a commentary on Manhattan’s shattered state—he chose to do it in St. Louis because he did not need to build a set. St. Louis’s natural end-times look filled in just fine. New York and St. Louis were brothers in blight—until they weren’t. The rapacious greed of the Reagan 1980s marked the rise of New York corporate raiders like Carl Icahn, who bought out St. Louis companies like Trans World Airlines (TWA), draining St. Louis of its money and resources and pride. TWA was “a broken-winged bird helpless before the pounce of the ultimate corporate predator,” wrote St. Louis magazine, describing the shock of Missourians that an out-of-state tycoon had bought something as essential as an airline purely to destroy it and pocket the profits.8 By the late 1980s, New York and St.

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In the late 1970s, as Ford told New York to drop dead, Cohn and Trump picked at the city’s corpse like vultures. Manhattan was ready to be torn down and bludgeoned and remade with blood money in concrete: Trump Tower, the Plaza, the many, many casinos. Corporate raiders who would later aid the Trump administration—Carl Icahn, Wilbur Ross, Rupert Murdoch—commenced a national shakedown disguised as economic revival. Scams stretched from Atlantic City to Gary, Indiana, to St. Louis and beyond, to international waters where moguls parked their stolen assets.29 Critical regulations were tossed—the fairness doctrine that had protected media; the labor laws that had protected unions.

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“What we were seeing with Russia was the fruition of a long-term strategy to try and compromise Treasury by cultivating civil servants. That’s why we sounded the alarm and reported it.”39 This internal threat to national security has only grown since 2015. The Treasury is now run by Steven Mnuchin, a lackey of Trump and fellow protégé of Trump’s old adviser Carl Icahn. Mnuchin has gone out of his way to ease sanctions on Russian oligarchs—in particular, Manafort’s former employer Oleg Deripaska—despite protest from Congress.40 Again, basic vetting by state officials—particularly during Trump’s “I have nothing to do with Russia” campaign phase—would have highlighted shady connections between the Trumps and Russia that were already in the public domain.

The Frackers: The Outrageous Inside Story of the New Billionaire Wildcatters
by Gregory Zuckerman
Published 5 Nov 2013

Now they, too, were nearly broke and the banks were making noises about calling in the loans. The U.S. economy was on a roll, so bankers gave McClendon and Ward some time to meet their payments. McClendon and Marc Rowland, the chief financial officer, flew to New York to ask some big-name investors, like Carl Icahn, to buy Chesapeake. After an hour’s discussion at Icahn’s office, he came to a decision. “Your bonds aren’t cheap enough,” Icahn said. His point: Chesapeake wasn’t yet enough of a bargain, even at seventy-five cents a share, because its debt wasn’t trading at the dirt-cheap prices that usually got Icahn excited.

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Ward renamed his company SandRidge Energy to signal that he was going after sandstone and other types of rock that had been drilled for decades. Let McClendon and Chesapeake spend all that money on shale, I’m going to find enough energy in old-fashioned rock, Ward was saying. Several months later, Ward approached Carl Icahn, the billionaire New York investor, who had cobbled a collection of energy companies into an entity called National Energy Group. Ward asked if Icahn was interested in merging his operation with Ward’s new company. Icahn was hesitant. He liked Ward on a personal level and thought he was bright, but Icahn was wary of all the money Ward and McClendon had spent at Chesapeake.

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“Mark Ruffalo got an Academy Award nomination and was in the Avengers movie after” becoming involved in the antifracking movement. Either way, the publicity helped pressure New York State officials to maintain the moratorium on fracking in the state and it helped focus national attention on the drilling, dealing a public relations blow to those in the business. • • • In late 2010, billionaire investor Carl Icahn disclosed that he had purchased nearly 6 percent of Chesapeake’s shares. Icahn is a so-called activist investor, or someone who buys big chunks of a company and then levies pressure on its management to enact changes aimed at getting shares higher. Weeks later, Icahn reached out to McClendon to let him know the company had piled on too much debt.

No Is Not Enough: Resisting Trump’s Shock Politics and Winning the World We Need
by Naomi Klein
Published 12 Jun 2017

NBC News: Trump’s cabinet appointments combined net worth of $14.5 billion Ben Popken, “Trump’s Cabinet Picks Have a Combined Wealth of $14.5B. How Did They All Make Their Money?” NBCNews.com, December 7, 2016, http://www.nbcnews.com/​business/​economy/​trump-s-cabinet-picks-have-combined-wealth-11b-how-did-n692681. Carl Icahn: worth more than $15 billion “Carl Icahn Profile,” Forbes.com, last modified April 12, 2017, https://www.forbes.com/​profile/​carl-icahn/. Steve Mnuchin and foreclosures Sean Coffey, California Reinvestment Coalition, personal correspondence with author or her research assistants, April 24, 2017: “tens of thousands of people were foreclosed on (or kicked out of their homes), with more than 15,000 of those foreclosures happening due to a reverse mortgage, a type of loan that can only be originated to seniors.”

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Not a Transition, but a Corporate Coup What Donald Trump’s cabinet of billionaires and multimillionaires represents is a simple fact: the people who already possess an absolutely obscene share of the planet’s wealth, and whose share grows greater year after year—the latest figure from Oxfam shows eight men are worth as much as half the world—are determined to grab still more. According to NBC News in December 2016, Trump’s picks for cabinet appointments had a staggering combined net worth of $14.5 billion (not including “special adviser” Carl Icahn, who’s worth more than $15 billion on his own). Moreover, the key figures who populate Trump’s cabinet are more than just a representative sample of the ultrarich. To an alarming extent, he has collected a team of individuals who made their personal fortunes by knowingly causing harm to some of the most vulnerable people on the planet, and to the planet itself, often in the midst of crisis.

Skygods: The Fall of Pan Am
by Robert Gandt
Published 1 Mar 1995

Another group based in Iowa and headed by a Pan Am pilot named Neil Sapp launched a quixotic effort of its own to take over the shuttle. One of the most persistent shoppers—and most irritating—was TWA owner Carl Icahn. Icahn was like a horsefly around Tom Plaskett’s head. Icahn had bought out TWA and was managing it in much the same enervating fashion as Frank Lorenzo had run Continental and Eastern. Like Lorenzo, Carl Icahn was a predatory creature, an animal of the roaring, deregulated eighties. What he lacked in hard cash he made up for in hubris. Although TWA was in scarcely better health than Pan Am, and even though Icahn was about to sell TWA’s own London gates to American Airlines, Icahn was talking about building a merged TWA-Pan Am airline into a new American megacarrier.

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The notion caused head-shakes among those who remembered Juan Trippe’s own frustrated merger talks with TWA when it was controlled by Howard Hughes. Virtually every CEO since Trippe had fantasized about such a merger. It was a tantalizing prospect—a single American flag carrier that would span virtually the entire planet. The trouble was, it was too late. It would be a marriage of the enfeebled. And no one in the industry was taking Carl Icahn seriously as a builder of such an enterprise. Icahn’s style was to buy on the cheap, in a highly leveraged takeover, and then sell off assets to fund his huge indebtedness. These days Tom Plaskett was ignoring Icahn’s phone calls. And that was making Icahn furious. “Plaskett will go down in history,” Icahn told the Wall Street Journal, “as the General Custer of the airlines.”

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On the morning of August 12, 1991, in the court of New York bankruptcy judge Cornelius Blackshear, Tom Plaskett unloaded most of Pan Am’s remaining assets to Delta Airlines for $416 million in cash and the assumption of $389 million worth of liabilities. To some, it still seemed like too good a deal for Delta. Several unsuccessful bidders, notably Carl Icahn, screamed that their own bids were being ignored. But Icahn’s bids were backed mostly by paper and pledges, with little hard cash. Delta was not only waving real money, it was immediately advancing $80 million of debtor-in-possession funding to keep Pan Am in operation. Even better, Delta was agreeing to invest in what was now being called the “restructured” Pan Am, the remaining sliver of the airline that would be based in Miami and fly to Latin America.

Confidence Game: How a Hedge Fund Manager Called Wall Street's Bluff
by Christine S. Richard
Published 26 Apr 2010

Berkowitz agreed to accept a Gibson acoustic guitar, which originally cost about $1,000, in exchange for his stake in the management company. “He got a bargain,” Ackman remembers. And he didn’t have to deal with Carl Icahn. On April 16, 2004, Hallwood Realty Partners announced that it would be merging with another company and that the shareholders would be bought out for $137.91 a share, a substantial premium to the $80 per share Carl Icahn had paid Ackman. It looked to Ackman like the “schmuck insurance” was going to pay off. Ackman called Icahn to congratulate him on the deal and to find out when Icahn would wire him $5 million, the amount Ackman believed his investors were entitled to under the schmuck insurance contract.

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IN EARLY 2003, in addition to preparing for upcoming testimony at the attorney general’s office and at the Securities and Exchange Commission, Ackman was working to liquidate Gotham’s holdings. He negotiated the sale of Gotham’s stake in Hallwood Realty Partners to renowned shareholder activist and corporate raider Carl Icahn for $80 a share. As part of the agreement, Ackman and Icahn worked out a “schmuck insurance” arrangement under which Ackman would get half of the profits if Icahn sold his Hallwood stake within 18 months. When Icahn asked Ackman if he had any other interesting investment ideas, Ackman launched into his argument for shorting MBIA and gave Icahn a copy of the Gotham report Is MBIA Triple-A?

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(Morgan Stanley) Government Accountability Office (GAO) Farmer Mac and Gotham Partners / Ackman and Grady County (Oklahoma) bonds, MBIA and Graham, Benjamin Graham Fisher & Company Great Depression Greenberg, Maurice “Hank,” Greenlight Capital Greenspan, Alan Gross, Bill comments on rescue proposals for bond insurers Grossman, Hy Grossman, Michael Grubman, Jack guaranteed-investment contracts (GICs) defined FSA and MBIA and Moody’s and Haines, Robert Hallwood Realty Partners LP Hamline University JB Hannauer & Company Harbus News Harrisburg International Airport (Pennsylvania) bonds Harvard Club Harvard University Ackman and Business School Law School “Havenrock II,” Hearst, Patty Heitmeyer, Richard Hempel, George Herskovitz, Marilyn Hilal, Paul background of Hilal, Phil Hobson, Cal Hottensen, Robert housing market, mortgage crisis and Credit Suisse projections Deutsche Bank projections Hovde Capital Advisors “How to Save the Bond Insurers” (Pershing Square / Ackman) Hubbard, Edward Hunt, Heather MBIA downgraded by Hurricane Katrina, MBIA and IBM Icahn, Carl Icahn Partners IKB Deutsche Industriebank AG ING Groep NV Initiative for a Competitive Inner City Institutional Investor “Insurance Charade, The” (Bloomberg News) Intelligent Investor (Graham) Is MBIA Triple-A? A Detailed Analysis of SPVs, CDOs, and Accounting and Reserving Policies at MBIA Inc.

Barbarians at the Gate: The Fall of RJR Nabisco
by Bryan Burrough and John Helyar
Published 1 Jan 1990

As stock prices plummeted in the crash of October 1987, Kravis and Roberts made their move, swooping in and secretly buying vast chunks of several major U.S. corporations. In 1988 they brought the LBO idea to one of those companies—its identity still secret—and were rejected. At the end of March, Kravis unveiled a 4.9 percent stake in Texaco, then under pressure from its largest shareholder, investor Carl Icahn. For two months Kravis and Roberts attempted to talk the oil company’s officials into a buyout or major restructuring. “We tried everything in the world to get them to do something with us,” Raether recalled, “and they wouldn’t.” The firm eventually sold its stock at a profit. The problem, it soon became clear, was that Kohlberg Kravis was all bite and no bark.

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“Peter knew what he read in the magazines, but he had about as much experience in investment banking as my father,” who had advised Bershad to stay away from Wall Street. Bershad’s replacement, hired in June 1986, was a controversial figure named Daniel Good, who as merger chief at E. F. Hutton had built a thriving business backing corporate raiders. Good, so boundlessly optimistic he was sometimes called “Dan Quixote,” didn’t back four-star investors like Carl Icahn or Boone Pickens. His clients were little-known “wanna-be” raiders, third-tier greenmailers such as Asher Edelman, a Fifth Avenue arbitrager, and Herbert Haft, the pompadoured scourge of the retail industry. Instead of LBOs, Cohen chose to funnel Shearson’s money into bridge loans for Good’s raiders.

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This would give Salomon bargaining leverage, Strong argued. It had the added advantage that, even if Salomon failed to ultimately gain control of the company, the firm would almost certainly realize a massive gain on its stock holdings. What Strong described was exactly the strategy that corporate raiders such as Boone Pickens and Carl Icahn had been using for years. For a major investment bank to try the same approach was unheard of, an order of magnitude beyond what Tom Hill and Shearson had sprung on Koppers that spring. But unusual deals, Strong argued, required unusual tactics. With Gutfreund’s approval, Strong wanted to begin acquiring RJR Nabisco stock on Monday morning and keep buying until they had spent $1 billion.

What They Do With Your Money: How the Financial System Fails Us, and How to Fix It
by Stephen Davis , Jon Lukomnik and David Pitt-Watson
Published 30 Apr 2016

The authors are founders (Stephen Davis, Jon Lukomnik) and a director (David Pitt-Watson) of the ICGN. 38. Institutional Investor Responsibilities (2013), https://www.icgn.org/policy/guidance. 39. www.youtube.com/watch?v=5YGc4zOqozo. 40. David Benoit, “Carl Icahn Wants to Create Twitter Movement,” Wall Street Journal, September 9, 2013, http://blogs.wsj.com/moneybeat/2013/09/09/carl-icahn-wants-to-create-twitter-movement/. 41. http://navalny.livejournal.com/. 42. “Access Blocked to Major Opposition Sites and Navalny’s Blog,” Moscow Times, March 14, 2014, www.themoscowtimes.com/news/article/access-blocked-to-major-opposition-sites-and-navalnys-blog/496148.html. 43.

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A passenger took a run-of-the-mill complaint about a musical instrument damaged in a baggage transfer and turned it into a YouTube video called “United Breaks Guitars.”39 The company was caught flat-footed when the video went viral, exacting a nasty reputation hit. Investors have joined in too, though less often. Yahoo! saw perhaps the best-known example in 2007 when Eric Jackson, a retail investor with a handful of shares, stirred a large-scale shareowner revolt through his Breakout Performance social media campaign. The activist investor Carl Icahn started using Twitter in June 2013 as part of a battle over the Dell buyout and quickly gained 76,000 followers.40 Then there is retail shareholder David Webb, in Hong Kong, who writes a blog from his home flat. People feed him tips about insider corporate wrongdoing that could never appear in Hong Kong’s mainstream media, because they are controlled by either the state or major families.

Big Mistakes: The Best Investors and Their Worst Investments
by Michael Batnick
Published 21 May 2018

Loeb wrote a letter to his investors saying that the majority of his stake was purchased “during the panicked selling that followed the short seller's dramatic claims.”18 In the five days since Loeb's filing, Herbalife's stock rose 20%. Then a week later, the Wall Street Journal reported that billionaire activist investor Carl Icahn took a stake in Herbalife, and a month later, disclosures showed he owned 12.98% of the company. Carl Icahn and Dan Loeb against Bill Ackman – a face‐off raging all because Ackman got on his soapbox. It's impossible to know for sure whether Loeb and Icahn actually thought Herbalife was a good business and its stock was undervalued. In fact, that part was sort of irrelevant.

After Steve: How Apple Became a Trillion-Dollar Company and Lost Its Soul
by Tripp Mickle
Published 2 May 2022

Slate pilloried it: Seth Stevenson, “Designed by Doofuses in California,” Slate, August 26, 2013, https://slate.com/business/2013/08/designed-by-apple-in-california-ad-campaign-why-its-so-terrible.html. One of the original corporate raiders: Cara Lombardo, “Carl Icahn Is Nearing Another Landmark Deal. This Time It’s with His Son,” Wall Street Journal, October 19, 2019, https://www.wsj.com/articles/carl-icahn-is-nearing-another-landmark-deal-this-time-its-with-his-son-11571457602; interview with Carl Icahn. Ahrendts had tripled: Jeff Chu, “Can Apple’s Angela Ahrendts Spark a Retail Revolution?,” Fast Company, January 6, 2014, https://www.fastcompany.com/3023591/angela-ahrendts-a-new-season-at-apple.

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The commercial would be a great spot for other companies; for Apple, it was a B. THE SENATE’S SPOTLIGHT on Apple’s growing cash hoard attracted Wall Street’s sharks. Apple’s share price was languishing as Samsung stole smartphone market share. Investors wanted the company to pay dividends. In August 2013, Carl Icahn trumpeted on Twitter that he had bought a large stake in Apple and spoken by phone with Cook. Icahn made his message clear: Apple needed to return capital to increase the price of its depressed shares. One of the original corporate raiders, Icahn had made a name for himself in the 1980s by amassing stakes in mismanaged companies such as TWA and pushing them to cut costs and sell assets.

Fire and Fury: Inside the Trump White House
by Michael Wolff
Published 5 Jan 2018

And Murdoch, finally arriving at the party he was in more than one way sorely late to, was as subdued and thrown as everyone else, and struggling to adjust his view of a man who, for more than a generation, had been at best a clown prince among the rich and famous. * * * Murdoch was hardly the only billionaire who had been dismissive of Trump. In the years before the election, Carl Icahn, whose friendship Trump often cited, and who Trump had suggested he’d appoint to high office, openly ridiculed his fellow billionaire (whom he said was not remotely a billionaire). Few people who knew Trump had illusions about him. That was almost his appeal: he was what he was. Twinkle in his eye, larceny in his soul.

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But Trump had grown up and built his business in New York, the world’s largest Jewish city. He had made his reputation in the media, that most Jewish of industries, with some keen understanding of media tribal dynamics. His mentor, Roy Cohn, was a demimonde, semiunderworld, tough-guy Jew. He courted other figures he considered “tough-guy Jews” (one of his accolades): Carl Icahn, the billionaire hedge funder; Ike Perlmutter, the billionaire investor who had bought and sold Marvel Comics; Ronald Perelman, the billionaire Revlon chairman; Steven Roth, the New York billionaire real estate tycoon; and Sheldon Adelson, the billionaire casino magnate. Trump had adopted a sort of 1950s Jewish uncle (tough-guy variety) delivery, with assorted Yiddishisms—Hillary Clinton, he declared, had been “shlonged” in the 2008 primary—helping to give an inarticulate man an unexpected expressiveness.

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This ritual was, everyone understood, more a pretext to a discussion of the power he held than it was, strictly, about personnel decisions. Still, in Trump’s poison-the-well fashion, the should-I-fire-so-and-so question, and any consideration of it by any of the billionaires, was translated into agreement, as in: Carl Icahn thinks I should fire Comey (or Bannon, or Priebus, or McMaster, or Tillerson). His daughter and son-in-law, their urgency compounded by Charlie Kushner’s concern, encouraged him, arguing that the once possibly charmable Comey was now a dangerous and uncontrollable player whose profit would inevitably be their loss.

The Taking of Getty Oil: Pennzoil, Texaco, and the Takeover Battle That Made History
by Steve Coll
Published 12 Jun 2017

Lipton, for example, now expressed doubts about the effects of merger mania on the long-term health of the country’s economy, this despite the personal fortune he had made during its halcyon days. He even drafted legislation and testified before Congress, urging that restrictions be imposed on corporate raiders such as Boone Pickens, Carl Icahn, and Irwin “The Liquidator” Jacobs. Lipton’s critics, and there were plenty of them, decried the hypocrisy of his sudden moralizing about takeovers. At a more personal level, merger maestros such as Lipton, Boisi, and even the ambitious Siegel, had by the fall of 1983 settled into a steady, quiet professional routine.

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They had come to Icahn’s office to cut a deal: Jamail, Pennzoil chairman J. Hugh Liedtke, and a handful of the other lawyers involved in the case. After wallowing in Texaco’s Dickensian bankruptcy proceedings since the previous April, Pennzoil v. Texaco had again come to life, and once more the puckish Jamail was at the center of things. Carl Icahn, an enormously successful corporate raider who had gained control of TWA Inc. in a hostile takeover, had decided there was potential for profit in Texaco’s travails. After the stock market collapse in October 1987, he had purchased about 15 percent of Texaco’s stock at fire sale prices from Australian investor Robert Holmes a Court.

…

I’m just bored.” “Where are you going?” “I’m going to get a cold beer.” “It’s only eleven o’clock in the morning,” Icahn observed. “Now, look, you can’t be my guardian,” Jamail answered, his voice animated with a playful malice. “I’m going to get a cold beer. And you’re invited.” “All right,” Carl Icahn said. “Let’s go.” They found a tavern, threw back a few beers, and began to talk. Jamail sketched out a scenario for Icahn: he suggested that the lawsuit could probably be settled for less than $3.5 billion. He urged Icahn to visit Texaco and press for a deal. “You’re the big, bad bogeyman now, not me,” Jamail told Icahn, whose reputation for launching hostile takeovers had indeed seemed to spook Texaco in recent weeks.

Devil's Bargain: Steve Bannon, Donald Trump, and the Storming of the Presidency
by Joshua Green
Published 17 Jul 2017

Milken and Drexel would fund these hostile takeovers by pledging the assets of the target corporation as collateral, in the same way that a home buyer obtains a mortgage by pledging the collateral of the home against the loan. This practice gave rise to an army of corporate raiders, men such as Ron Perelman, Carl Icahn, T. Boone Pickens, and Nelson Peltz, who became rich selling junk bonds through Drexel Burnham to finance predatory raids on such Fortune 100 companies as TWA, Disney, Revlon, and Phillips Petroleum. So fearsome did Milken’s reputation become that sometimes the mere rumor that a company might come under siege was enough to send it scrambling toward a defensive merger.

…

— Trump thought being president was about asserting dominance. Just after he’d locked up the GOP nomination, Trump said something to me that crystallized his view of politics and explains, to my mind, much of his subsequent difficulties. “I deal with people that are very extraordinarily talented people,” he told me. “I deal with Steve Wynn. I deal with Carl Icahn. I deal with killers that blow these [politicians] away. It’s not even the same category. This”—he meant politics—“is a category that’s like nineteen levels lower. You understand what I’m saying? Brilliant killers.” Trump was equating politics with business and the presidency with the job of being a big-shot CEO, a “killer.”

The Alpha Masters: Unlocking the Genius of the World's Top Hedge Funds
by Maneet Ahuja , Myron Scholes and Mohamed El-Erian
Published 29 May 2012

As I was ushered up to the forty-second floor and led into a conference room with sweeping views of all of midtown Manhattan in the far distance, I knew I’d landed somewhere where people were having a real impact on the world in a big way and felt fortunate to be there. I was fascinated hearing about how the team identified credit risk and mitigated losses for thousands of clients and outside parties. Hearing about how the bank would work closely with companies advising on potential mergers and takeover targets seemed exciting—this must be what Carl Icahn does, I thought. Citigroup had “the big balance sheet” that dwarfed many of the more prestigious investment banking teams on the Street, and so we were always allowed into the consortium for deals—even as the deal arranger. I left the building with an offer for a semester internship in hand, convinced I had found my calling with the good guys—good guys with nice shoes.

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Once the managers realized I was truly interested in things like portfolio construction and alpha generation—a return in excess of a benchmark adjusted for risk and country analysis—I started to get more access and even some complimentary comments on Squawk Box from Julian Robertson, Michael Steinhardt, and Carl Icahn. Beyond that, I continued to speak to investors and get a pulse for what they were seeing, hearing, and concerned about within hedge funds. As I continued to study the leaders of this new age of hedge funds, I realized that the investors who had consistently outperformed the broader market for a significant period of time, these alpha masters, were bound together under the hedge fund umbrella, yet were wildly unique.

Tailspin: The People and Forces Behind America's Fifty-Year Fall--And Those Fighting to Reverse It
by Steven Brill
Published 28 May 2018

Working at Drexel Burnham Lambert, a second-tier brokerage and investment bank, Milken—who would go to prison in 1991 for securities law violations—figured out that if companies had sufficient earnings or potential earnings, he could help what would become a group of buccaneer raiders, including Carl Icahn, Victor Posner, and Boone Pickens, borrow the money to buy them. The interest rates on what came to be called “junk bonds,” which Milken specialized in, would be high because the risk would seem high. However, if the raider took over and made the right expense cuts and sold off the right pieces, and then cashed out, the result would be a home run.

…

When the company yields by purchasing huge amounts of its stock, the hedge funder usually sells his stake at the now increased price and goes away. Even Apple yielded, beginning in 2013, when it borrowed billions of dollars (rather than tap profits it was shielding overseas from U.S. taxes) to finance a massive buyback that was being pushed by, among others, raider Carl Icahn. Whether Icahn’s assault on Apple produced a positive or negative result for the company is beside the general point, which is that these kinds of drive-by shareholders have no accountability for the long-term damage that those who run the corporations they briefly own might do to please them.

…

As The Washington Post put it, the company was “swept away by the wave of corporate takeovers and buyouts that have come to dominate American business in the 1980’s.” The raiders’ victory didn’t last. As of 2016, the larger textile maker that had purchased the bulk of the Stevens operations in 1988 had gone through a 2003 bankruptcy stemming from foreign competition. It was then bought by corporate raider Carl Icahn. Most of its manufacturing is now done overseas, and what remains has been highly automated. The industry as a whole shared the same fate. In 1973, there were 1,024,000 textile workers in the United States. In 2016, there were 112,000, and the average hourly wage for those left in American textile factories was 30 percent lower than it would have been if the low, non-union wages prevailing in 1975 (the year closest to 1973 for which there is wage data) had only kept up with inflation.

Hard Landing
by Thomas Petzinger and Thomas Petzinger Jr.
Published 1 Jan 1995

One of the least welcome effects of the strike was its depressing influence on United’s stock. This was the precise midpoint of the 1980s, when the takeover epidemic was intensifying. A low stock price on even the biggest corporations was like a blue light twirling in the ceiling of a dime store, an advertisement to the likes of Carl Icahn or Boone Pickens or Sir James Goldsmith or Ivan Boesky or Donald Trump or for that matter, Frank Lorenzo. United was an inviting target in another respect. Unlike Pan Am, which had been raiding its pension plans to keep afloat, United had been overfunding its pension accounts—or so Dick Ferris was told by his advisors on Wall Street.

…

Lorenzo, they could see, had an additional and probably greater motive: to lay his hands on TWA’s computer reservation system, the same system that Bob Crandall had helped to create in the early 1970s, before joining American Airlines. In the end, Lorenzo’s reputation would cost him TWA. The company’s unions were so mortified at the idea of having him on the property that they maneuvered the takeover artist Carl Icahn into a position to take control, failing to appreciate that he was no picnic either. There was something vague and off-center about Icahn; whereas Lorenzo was accused of forever backing out of his deals, Icahn would never quite come to closure on one. Lorenzo and Icahn tussled over TWA for weeks, the battle growing increasingly personal.

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Plaskett remained unaware that Wolf had already made up his mind to the contrary. Crandall was apoplectic that Wolf had stolen the march into Heathrow, but he made a quick recovery. There was a second American company with precious landing rights at Heathrow. It was TWA, and TWA was in nearly as sorry a condition as Pan Am. In the rarefied atmosphere of the race to London, Carl Icahn of TWA could force Crandall to pay top dollar. For six routes to Heathrow Crandall forked over $445 million; Wolf had paid less for more from Pan Am. Icahn, for additional millions, agreed to throw in 40 slots at O’Hare. With this purchase Crandall scored a double, because many of those slots had been on lease from TWA to United.

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism
by Arun Sundararajan
Published 12 May 2016

A high point of the visit was the opportunity I got to try on a Lyft employee’s Halloween costume. He had dressed up as a Lyft car, using a skillfully constructed cardboard contraption. Three years later, Lyft had raised over a billion dollars in venture capital (including $100 million from the legendary investor Carl Icahn) and was in 60 cities around the United States. Although often in the news because of the bruising battles it has waged with Uber for market share, Lyft projects a decidedly kinder and gentler feel than their larger competitor, even as they have graduated from the giant pink mustaches to a more subtle branding strategy.

…

These executives are present in growing numbers at events like OuiShare Fest (something my friend Charly Strum had pointed out to me earlier in the day with a sardonic remark about there being “more high heels than Birkenstocks this year”). Active investors range from New York’s Union Square Ventures and Silicon Valley’s Andreessen Horowitz to the hedge funds Black Rock and Tiger Global Management, the investment banking firm Goldman Sachs, the business magnate Carl Icahn, General Motors, and the Indian media company Bennett and Coleman. Of particular interest is the Collaborative Fund, founded by Craig Shapiro in 2011, which invests almost exclusively in the sharing economy. The infusion of venture capital and the emergence of platforms with large corporate investors lead many to believe that any ideals associated with a pre-2010 sharing economy cannot be sustained.

The Impulse Society: America in the Age of Instant Gratification
by Paul Roberts
Published 1 Sep 2014

The raiders’ m.o. was simple: they looked for struggling companies whose sagging share price made them a bargain, quietly bought up a controlling stake (usually with high-interest loans, known as “junk bonds”), and then began what was euphemistically referred to as “restructuring.” In some cases, the raiders—epitomized by flashy characters such as bond trader Carl Icahn and real estate mogul Victor Posner—would go on a downsizing tear. They shut down underperforming divisions and laid off hundreds and even thousands of employees before selling the restructured firm at a substantial profit. In other cases, the target would simply be liquidated: broken up into separate entities and sold off piecemeal.

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In a truly efficient market, such short-termism would be recognized and punished. But in the self-centered economy, the market is in on the scam. Thus, shareholders cheer when Microsoft or Apple or Intel spends tens of billions of dollars on share buybacks. Consider the following: in August 2013, Carl Icahn, the corporate-raider-turned-activist-investor, announced (on Twitter, naturally) that he had acquired a $1 billion stake in Apple, and was demanding that the company spend $150 billion to buy back its own shares. Such a move, Icahn insisted, would lift Apple’s share price from $487 to $625 (and, others noted, net the raider a $280 million capital gain48).

One Up on Wall Street
by Peter Lynch
Published 11 May 2012

For instance, the SEC says a mutual fund such as mine cannot own more than ten percent of the shares in any given company, nor can we invest more than five percent of the fund’s assets in any given stock. The various restrictions are well-intentioned, and they protect against a fund’s putting all its eggs in one basket (more on this later) and also against a fund’s taking over a company à la Carl Icahn (more on that later, too). The secondary result is that the bigger funds are forced to limit themselves to the top 90 to 100 companies, out of the 10,000 or so that are publicly traded. Let’s say you manage a $1-billion pension fund, and to guard against diverse performance, you’re required to choose from a list of 40 approved stocks, via the Inspected by 4 method.

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Between the domestic buyout groups (Kohlberg, Kravis, and Roberts; Kelso; Coniston Partners; Odyssey Partners; and Wesray), the European firms and buyout groups (Hanson Trust, Imperial Chemical, Electrolux, Unilever, Nestlé, etc.), and the individual corporate raiders with sizable bankrolls (David Murdock, Donald Trump, Sam Hyman, Paul Bilzerian, the Bass brothers, the Reichmanns, the Hafts, Rupert Murdoch, Boone Pickens, Carl Icahn, Asher Edelman, et al.) any company, large or small, is up for grabs. The popularity of the leveraged buyout, or LBO, through which entire companies or divisions are “taken private”—purchased by outsiders or by current management with money that’s borrowed from banks or raised via junk bonds. The phenomenal popularity of these junk bonds, as first invented by Drexel Burnham Lambert and now copied everywhere.

The Art of Execution: How the World's Best Investors Get It Wrong and Still Make Millions
by Lee Freeman-Shor
Published 8 Sep 2015

Back in 1979, a seminal research paper – again by Kahneman and Tversky – showed that the pain experienced from losing, say $50, was far worse than the joy we experience when we win $50.26 We find it easy and pleasurable to sell a winning stock, but difficult and painful to sell out of a losing position. There’s also the question of whether a stock might rally after we sell it. The very idea freezes many into inaction. “In life and business, there are two cardinal sins. The first is to act precipitously without thought and the second is to not act at all.” – Carl Icahn “There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.” – John F. Kennedy The Assassins were some of the most disciplined investors I have met, and a significant factor in their ability to make money was that they cut their losses consistently.

Saudi America: The Truth About Fracking and How It's Changing the World
by Bethany McLean
Published 10 Sep 2018

Investment analysts told Reuters they’d had no idea about the loans. Over the next month, Chesapeake’s stock fell 30 percent. In the spring of 2012, Chesapeake’s board stripped McClendon of his chairmanship, and over the course of the next year, new investors who thought they could clean up Chesapeake, including Carl Icahn, took seats on the Chesapeake board. Icahn, according to someone familiar with events, initially thought he could control McClendon’s most reckless impulses, especially with McClendon no longer serving as both CEO and chairman, but began to realize it was futile. Lou Simpson, who had run Geico’s investment portfolio for Warren Buffett for decades, and who had joined the board in 2011, was also furious at the state of affairs, according to someone close to events.

Trillions: How a Band of Wall Street Renegades Invented the Index Fund and Changed Finance Forever
by Robin Wigglesworth
Published 11 Oct 2021

“We’re now starting to see the fragility associated with these things.” * * * ♦ MANY OF THE SKEPTICS ARGUE that the biggest fault line lies not in the big, mainstream index funds that invest in stocks, but in ETFs that track less traded, more idiosyncratic markets—such as bonds. Carl Icahn, the famed corporate raider, once went as far as to call BlackRock “a very dangerous company” due to its being the world’s biggest provider of fixed-income ETFs, while sitting next to Larry Fink on an industry conference stage.9 With the mischievousness and nonchalance that comes with age and what Wall Street calls “fuck-you money,” he predicted how the bond market would eventually “hit a black rock.”

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,” Journal of Finance, September 22, 2018. 8. Kenechukwu Anadu, Mathias Kruttli, Patrick McCabe, Emilio Osambela, and Chae Hee Shin, “The Shift from Active to Passive Investing: Potential Risks to Financial Stability?,” Federal Reserve Bank of Boston, 2018. 9. Matthew Goldstein and Alexandra Stevenson, “Carl Icahn Calls BlackRock a ‘Very Dangerous Company,’ ” New York Times, July 15, 2015. 10. Joe Rennison, “How the Fed Helped Bond ETFs Meet Their Biggest Challenge,” Financial Times, March 26, 2020. 11. Robin Wigglesworth, “All That Drama About Fixed-Income ETFs Was Overplayed,” Financial Times, April 22, 2020. 12.

Why Wall Street Matters
by William D. Cohan
Published 27 Feb 2017

Morgan once controlled, set out to create a new supply of these so-called junk bonds by persuading companies that never before had access to the capital markets—where companies go to get capital from public investors as opposed to trying to get it from banks—to issue bonds underwritten by Drexel Burnham. Not only did Drexel underwrite these bonds for corporations that could not get financing from more traditional sources—banks, insurance companies, and the public-equity markets—but it also pioneered the selling of junk bonds to help corporate raiders, like Carl Icahn and T. Boone Pickens, get the capital they needed to take over companies such as TWA and Gulf Oil, which they would otherwise have been unable to do, and to help private-equity firms, such as Kohlberg Kravis Roberts and the Texas Pacific Group, get the money they needed to buy companies with their investors’ money.

Age of Greed: The Triumph of Finance and the Decline of America, 1970 to the Present
by Jeff Madrick
Published 11 Jun 2012

The most prominent of the early practitioners was T. Boone Pickens, a former geologist and Oklahoma oil wildcatter, who would buy some shares of a company, then bid for it, hoping to sell out to a higher bidder and pocket the profit on his initial purchase of shares. Thus, he put companies “in play,” and earned “greenmail” in the process. Carl Icahn used Boone Pickens’s tactics to launch still bigger attacks. For Wall Street, the profitability of takeovers increased as the number and size of deals grew. The Wall Street investment bankers and the new takeover “artists” like Pickens and Icahn, who provoked hostile bidding contests, accrued more capital to make higher bids as they engineered more deals.

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Some of these discarded subsidiaries and operations no doubt might not have succeeded over time, but others would have. With Milken’s critical help, corporate debt levels exploded in America. Milken also financed other iconoclastic takeover artists who, like Pickens, rose to prominence on the basis of his financial power. Carl Icahn became a more successful greenmailer even than Pickens. In 1982, Icahn made a bid for the department store chain Marshall Field, driving the company into the hands of the British retailer Batus. The Icahn group, which had bought a substantial portion of the shares beforehand, made $100 million in greenmail.

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The unleashing of unregulated self-interest since the 1980s, he believed, was a sufficient condition for prosperity. 15 George Soros and John Meriwether FABULOUS WEALTH AND CONTROVERSIAL POWER Until the mid-1980s, the takeover movement was the way to make the most money on Wall Street. Men like Henry Kravis, George Roberts, Boone Pickens, and Carl Icahn built enormous fortunes, and by the 2000s all were billionaires. Icahn was frequently listed among the twenty-five richest Americans, eventually with some $8–9 billion in personal wealth, and Kravis and Roberts were reported to have about half that. Starting in the mid-1980s, managing hedge funds made more great fortunes for more people than the takeover movement did, and replaced them at the glamorous pinnacle of the financial community.

Americana: A 400-Year History of American Capitalism
by Bhu Srinivasan
Published 25 Sep 2017

The best and the brightest among them looked west to Beverly Hills, where Michael Milken could raise billions of dollars when the need arose, junk bonds becoming the pirate ship on which the corporate raiders sailed. • • • IF THERE WAS A COMPETITION to find a real-life equivalent to Larry the Liquidator, who relished the persona of financial agitator in the 1980s, the award would have gone to Carl Icahn. Raised in a middle-class home in Queens, Icahn went to Princeton and then enrolled at NYU School of Medicine for two years. He dropped out and joined the army, where his main contribution seems to have been playing poker. After these detours, he found himself on Wall Street through his uncle. He thrived in short order in the abstract world of options trading, where his primary activity consisted of arbitrage, finding mathematical discrepancies in pricing that allowed risk-free profits.

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It seemed that business principles were fairly universal and applicable across the board. This hypothesis would be tested. In the spring of 1985, the nation’s fifth-largest airline, TWA, found itself the target of such evolutionary changes in behavior. Through a securities filing known as a 13D, Carl Icahn had declared that he had accumulated a 20 percent stake in TWA. TWA’s management panicked. To ward off a raider like Icahn, TWA agreed to be acquired by Texas Air. The acquisition by Texas Air would have left Icahn with a profit in the tens of millions on his holdings. But to the surprise and dismay of corporate America, Icahn actually wanted to own the company.

…

boom of the sixties: John Brooks, The Go-Go Years (New York: Weybright & Talley, 1973), 138–39. home in Queens: Bruck, Predators’ Ball, 150–51. “I don’t know”: Ibid., 157. known as greenmail: Ibid. conglomerate didn’t look: Brooks, Go-Go Years, 154–55. 20 percent stake in TWA and notoriously bad relations: Carol J. Loomis, “The Comeuppance of Carl Icahn,” Fortune, August 18, 2013. behind Icahn’s bid: Ibid. they formed KKR: George Anders, Merchants of Debt: KKR and the Mortgaging of American Business (New York: Basic Books, 1993), 45–47. RJR Nabisco for: Ibid., 214. ninety-eight-count indictment: Ibid., 486–87. Chapter 33: Shoes Rolls-Royce Corniche: Mike Tyson, Undisputed Truth (New York: Plume, 2013), 176.

Americana
by Bhu Srinivasan

The best and the brightest among them looked west to Beverly Hills, where Michael Milken could raise billions of dollars when the need arose, junk bonds becoming the pirate ship on which the corporate raiders sailed. • • • IF THERE WAS A COMPETITION to find a real-life equivalent to Larry the Liquidator, who relished the persona of financial agitator in the 1980s, the award would have gone to Carl Icahn. Raised in a middle-class home in Queens, Icahn went to Princeton and then enrolled at NYU School of Medicine for two years. He dropped out and joined the army, where his main contribution seems to have been playing poker. After these detours, he found himself on Wall Street through his uncle. He thrived in short order in the abstract world of options trading, where his primary activity consisted of arbitrage, finding mathematical discrepancies in pricing that allowed risk-free profits.

…

It seemed that business principles were fairly universal and applicable across the board. This hypothesis would be tested. In the spring of 1985, the nation’s fifth-largest airline, TWA, found itself the target of such evolutionary changes in behavior. Through a securities filing known as a 13D, Carl Icahn had declared that he had accumulated a 20 percent stake in TWA. TWA’s management panicked. To ward off a raider like Icahn, TWA agreed to be acquired by Texas Air. The acquisition by Texas Air would have left Icahn with a profit in the tens of millions on his holdings. But to the surprise and dismay of corporate America, Icahn actually wanted to own the company.

…

boom of the sixties: John Brooks, The Go-Go Years (New York: Weybright & Talley, 1973), 138–39. home in Queens: Bruck, Predators’ Ball, 150–51. “I don’t know”: Ibid., 157. known as greenmail: Ibid. conglomerate didn’t look: Brooks, Go-Go Years, 154–55. 20 percent stake in TWA and notoriously bad relations: Carol J. Loomis, “The Comeuppance of Carl Icahn,” Fortune, August 18, 2013. behind Icahn’s bid: Ibid. they formed KKR: George Anders, Merchants of Debt: KKR and the Mortgaging of American Business (New York: Basic Books, 1993), 45–47. RJR Nabisco for: Ibid., 214. ninety-eight-count indictment: Ibid., 486–87. Chapter 33: Shoes Rolls-Royce Corniche: Mike Tyson, Undisputed Truth (New York: Plume, 2013), 176.

Television Is the New Television: The Unexpected Triumph of Old Media in the Digital Age
by Michael Wolff
Published 22 Jun 2015

More surprisingly, as channels began to rely on fees from cable companies, those same cable companies came to control the Internet. Viacom, in 2005, divided itself in two, one part a mostly cable programming company, retaining the Viacom name, and then the other part, a new independent CBS, a mostly network broadcaster. Time Warner, after an assault by activist investor Carl Icahn in 2006, spun off its cable system, TWC (completed in 2009). Comcast, in 2009, bought NBC Universal, a content company. Each of these moves suggests doubt about a fundamental direction of the business and is, in some fashion, a circling-the-wagons move. Viacom, in part believing the Internet view that advertising will more and more migrate to digital form, pushes off CBS, its still entirely ad-supported broadcaster, in the hopes that, no longer competing with its cable channel brothers at Viacom (MTV, Comedy Central, Nickelodeon, etc.)

King of Capital: The Remarkable Rise, Fall, and Rise Again of Steve Schwarzman and Blackstone
by David Carey
Published 7 Feb 2012

Doing right by shareholders wasn’t high on every CEO’s agenda, so it wasn’t hard for the raiders to cast themselves as militant reformers intent on liberating businesses from the clutches of venal, high-living CEOs who cared more about their perks than about shareholders. To the corporate world, the raiders were a ragtag band of greedy predators whose aim was to pillage companies and oust management for personal gain. No one embodied the raider role better than Carl Icahn, a lanky, caustically witty New York speculator whose tactics were typical. After buying up shares, he would demand that the company take immediate steps to boost its share price and give him a seat on its board of directors. When his overture was rebuffed, he’d threaten a proxy fight or a takeover and rain invective on the management’s motives and competence in acidly worded letters to the board that he made public.

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Blackstone’s first buyout developed that way. It was puny compared with KKR’s big deals—a mere $640 million—but it would have an immense impact on the young firm’s image and fortunes. It began when Altman telephoned Donald Hoffman, a top official at USX Corporation, the parent of U.S. Steel. USX was battling for its corporate life with Carl Icahn, the much feared corporate raider. In 1986 Icahn had amassed a nearly 10 percent stake in USX and launched an $8 billion hostile takeover bid. U.S. Steel was three months into a strike that was crippling steel production and had pummeled the stock. Over the next year, Icahn hectored USX to off-load assets and take other steps to boost its share price.

A First-Class Catastrophe: The Road to Black Monday, the Worst Day in Wall Street History
by Diana B. Henriques
Published 18 Sep 2017

The company now planned to “recapitalize” itself by giving a third of its shares to its employees and offering other stockholders (who included the pension funds run by Machold, Goldin, and Unruh) a package of new stock and bonds whose value was in dispute on Wall Street. That recapitalization scheme prompted another corporate raider, Carl Icahn, to launch his own takeover bid for Phillips, mustering the services of the investment bank Drexel Burnham Lambert along with several Drexel clients to help him finance an $8.1 billion bid. He also had the support of the takeover speculator Ivan F. Boesky, who was unhappy with the package of securities Phillips had offered.

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It was the debut of a new force in the takeover battles to come—public pension fund chiefs wielding shares worth tens of billions of dollars were claiming a seat at the takeover table. The best way to see the new reality taking shape in the market is to jump forward two weeks, to a congressional hearing on a broad range of takeover issues, initially focusing on the Phillips battle. As Carl Icahn, Boone Pickens, and several Phillips executives sat simmering beside him, Jay Goldin carefully explained the new institutional council’s origins and its agenda. Almost two dozen public pension fund directors, with authority over more than $100 billion, were now part of the new council, he reported.

The Meritocracy Trap: How America's Foundational Myth Feeds Inequality, Dismantles the Middle Class, and Devours the Elite
by Daniel Markovits
Published 14 Sep 2019

Beginning in the 1980s, an unprecedented wave of corporate restructurings streamlined American firms. It is almost impossible to find any case of corporate downsizing before the mid-1980s, and some large companies even adopted express “no layoff” policies. But now the reorganizations expressly sought to eliminate what the corporate raider Carl Icahn once called “incompetent” and “inbred” middle managers, “layers of bureaucrats reporting to bureaucrats.” The cull was dramatic: AT&T, for example, restructured one of its units with the express aim of reducing the ratio of managers to nonmanagers from 1:5 to 1:30. Across restructurings in the 1980s and 1990s, middle managers were downsized at nearly twice the rate of nonmanagerial workers.

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Dolan, eds., “Forbes 400: The Definitive Ranking of the Wealthiest Americans,” Forbes, October 3, 2018, www.forbes.com/forbes-400/#7de6813e7e2f. Hereafter cited as Kroll and Dolan, “Forbes 400.” The founders who hold these shares include: Jeff Bezos (1), Bill Gates (2), Warren Buffett (3), Mark Zuckerberg (4), Larry Ellison (5), Larry Page (6), and Sergey Brin (9). Others among the top one hundred—for example, George Soros (60) and Carl Icahn (31)—owe their fortunes to carried interest. reported by one-percenters: Victor Fleischer, “How a Carried Interest Tax Could Raise $180 Billion,” New York Times, June 5, 2015, http://nytimes.com/2015/06/06/business/dealbook/how-a-carried-interest-tax-could-raise-180-billion.html. Fleischer reaches this result by inference from the legal structures typically employed by investment funds.

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express “no layoff” policies: According to “The 100 Best Companies to Work for in America,” in 1993 ten had “no layoff” policies; by 1997 only two did, and only one of the two was a public company. See Cappelli, The New Deal at Work, 115. “layers of bureaucrats reporting to bureaucrats”: See Carl Icahn, “Leveraged Buyouts: America Pays the Price; The Case for Takeovers,” New York Times Magazine, January 29, 1989 (quoted in Adam Goldstein, “Revenge of the Managers: Labor Cost-Cutting and the Paradoxical Resurgence of Managerialism in the Shareholder Value Era, 1984 to 2001,” American Sociological Review 77, no. 2 (2012): 273, hereafter cited as Goldstein, “Revenge of the Managers”).

Company: A Short History of a Revolutionary Idea
by John Micklethwait and Adrian Wooldridge
Published 4 Mar 2003

Any acquired business was theoretically up for sale almost immediately: Hanson was rather like an antique dealer, buying slightly dingy assets, polishing them up, and putting them back in the shop window. Most of the other raiders also had a sense of swagger. T. Boone Pickens was a folksy oilman who found that he could make a fortune by failing to take over oil firms: thanks to the rising share price, he made $500 million in one foray at Gulf alone. Carl Icahn, a former stock-market trader who liked to pontificate about the way that “the corporate welfare state” was smothering the American economy, bought TWA. The most beguiling of all was Sir James Goldsmith (1933–1997). Having made several hundred million dollars asset-stripping Diamond International, a timber firm, he bought 11.5 percent of Goodyear in 1986.

Damsel in Distressed: My Life in the Golden Age of Hedge Funds
by Dominique Mielle
Published 6 Sep 2021

Watershed Asset Management managed over $2 billion in assets in the heyday and became an extraordinarily successful fund. Here is where it gets interesting, though. She decided to shut down in 2015 and proceeded to return all external capital. Not because she had lost money—au contraire—or had reached an age at which you would hesitate to give anyone your kid’s monthly allowance anyway (Carl Icahn is eighty-four years old—think about that). No, she believed that the field was too crowded, the alpha generators gone, and future returns not high enough for the fees. She turned out to be prescient and a pioneer there too. We had a working relationship for over two decades until we served together as independent directors on a corporate board.

The Wisdom of Finance: Discovering Humanity in the World of Risk and Return
by Mihir Desai
Published 22 May 2017

It turns out that the story is richer and more complex than I’ve made out so far. The CEO who died, Melvin Gordon, had married into the Rubin family, that had historically controlled Tootsie Roll. He had been CEO for more than fifty years (he died at age ninety-five) and had repeatedly refused the overtures of Carl Icahn, a notorious corporate raider, who had wanted to sell the company to a larger candy company, like Mars or Hershey’s. The Gordon/Rubin family owned a fair chunk of Tootsie Roll, but the key is that they controlled the company with a separate class of shares that had extra voting rights, effectively meaning they would always call the shots.

The Psychopath Test: A Journey Through the Madness Industry
by Jon Ronson
Published 12 May 2011

I wondered if the screenwriters had taken the line from Al Dunlap, but later I discovered that he hadn’t been the only bigwig to say it. “You want a friend in Washington? Get a dog,” Harry Truman had apparently said during his presidency, according to the 1975 biographical play Give ’em Hell, Harry! “You learn in this business, if you want a friend, get a dog,” said the corporate raider and pharmaceutical chief Carl Icahn at some point during the mid-1980s. “If you want to be liked, get a dog,” said the host of CBS’s Inside Edition, Deborah Norville, in the early 1990s. “The people you work with are not your friends.” We gathered in the kitchen—Al, Judy, and Sean the bodyguard. I cleared my throat. “You know how I said in my e-mail that your amygdala might not shoot the requisite signals of fear to your central nervous system and that’s perhaps why you’ve been so successful and so interested in the predatory spirit?”

Data-Ism: The Revolution Transforming Decision Making, Consumer Behavior, and Almost Everything Else
by Steve Lohr
Published 10 Mar 2015

Before Mount Sinai, he was the chief science officer at Pacific Biosciences, a gene sequencing company in Silicon Valley. Schadt did not move east for an ordinary job. He was given the mandate to create an institute with a $100 million budget for the first five years, the Icahn Institute for Genomics and Multiscale Biology. Most of the funding comes from the man whose name is on the institute, Carl Icahn, the Wall Street financier and philanthropist. Icahn has taken a particular interest in genetics, having also paid for a genomics laboratory that bears his name at Princeton, his alma mater. Hammerbacher came away impressed from that meeting with Schadt. He knew enough about health care to know that it can be a bureaucratic, slow-moving industry.

The Decline and Fall of IBM: End of an American Icon?
by Robert X. Cringely
Published 1 Jun 2014

Shareholder buybacks, then, ought to allow shareholders to receive more money and pay less tax on that money because it is taxed only once at the lower capital gains rate, and shareholders who don’t want to sell shares back aren’t required to. This is the sort of gambit reformed corporate raider Carl Icahn loved to push on the companies in which he invested. IBM, unlike some of the Icahn target companies like Apple and eBay, isn’t at all resistant to buying back its own shares. In the last decade, in fact, IBM has spent $101 billion buying back shares, thereby reducing the number outstanding by about a third.

Extreme Money: Masters of the Universe and the Cult of Risk
by Satyajit Das
Published 14 Oct 2011

LBOs now relied on paying down debt from selling assets, cost cutting, reducing business investment, and other corporate auto-cannibalism: “We’re always cutting, cutting, cutting.... There’s the risk that you may cut out something that you really need.”9 In the 1980s, corporate raiders—T. Boone Pickens, Carl Icahn, Victor Posner, Robert M. Bass, Kirk Kerkorian, Sir James Goldsmith, Saul Steinberg—dominated LBOs. Boone Pickens made a series of raids on major oil companies, realizing that they were literally liquidating themselves by depleting their reserves without investing in exploration and development to replenish them.

…

When Goldman Sachs and Lehman Brothers issued the first junk bonds in 1977, Milken and Drexel seized the opportunity, starting with a $30 million issue for Texas International. Over time, they found new issuers of junk bonds—Milken’s mobsters. Drexel forged relationships with the new robber barons—buyout firms, entrepreneurial outsiders like Turner Broadcasting, MCI, and McCaw Cellular, and aggressive corporate raiders like Carl Icahn and Boone Pickens. Drexel’s Christian Anderson summarized the situation: “There are only two kinds of companies—the comers and the goers. We finance the comers.”28 Observers later noted: “Pumped into buyouts, Milken’s junk bonds became a high-octane fuel that transformed the LBO industry from a Volkswagen Beetle into a monstrous drag race belching smoke and fire.”29 Harvard-trained Fred Joseph, Drexel president and CEO, wanted to build the firm to rival Goldman Sachs, then, as now, the benchmark for excellence.

Who Needs the Fed?: What Taylor Swift, Uber, and Robots Tell Us About Money, Credit, and Why We Should Abolish America's Central Bank
by John Tamny
Published 30 Apr 2016

Thanks largely to financing from traditional banks and investment banks, U.S. corporations had purchased all manner of companies unrelated to their core mission. Others had become top heavy in terms of unaccountable executives enjoying excessive executive perks and had consequently grown somewhat flabby by the 1970s. Milken’s innovation involved backing upstarts largely shunned by the blue-chip banks (think Carl Icahn, T. Boone Pickens, Reginald Lewis—the first black CEO of Fortune 500 company Beatrice Foods) eager to restructure corporations that were operating at a fraction of their potential. This included “breaking up” large-for-large’s-sake corporations by selling pieces to investors with a stated objective of running the business lines purchased more effectively.

The Smartphone Society
by Nicole Aschoff

Start-ups and unicorns, many of whom have never earned a dime in profit, craft stories of warp-speed growth rooted in network effects and low marginal costs of distribution. They promise to remake markets and reengineer society through mobile tech and killer apps and venture capitalists are enthralled. They could be getting a piece of the next Facebook, the next Slack (a popular workflow platform), the next Uber. Individual investors such as Carl Icahn, venture capital firms such as Andreessen Horowitz, and funds such as Softbank’s Vision Fund and the Collaborative Fund have dumped hundreds of billions of dollars into tech start-ups over the past decade. The Silicon Valley spirit is even bigger than the promise of its platforms to create value and success for individuals and firms, however.

The Antisocial Network: The GameStop Short Squeeze and the Ragtag Group of Amateur Traders That Brought Wall Street to Its Knees
by Ben Mezrich
Published 6 Sep 2021

Most famously, in 2008, a surprise takeover attempt of the German automaker Volkswagen by rival Porsche drove Volkswagen’s stock price up by a factor of 5—briefly making it the most valuable company in the world—in two quick days of trading, as short selling funds struggled to cover their positions. Similarly, a battle between two hedge fund titans—Bill Ackman, of Pershing Square Capital Management, and Carl Icahn—led to a squeeze involving supplement maker—and alleged pyramid marketer—Herbalife, which cost Ackman a reported $1 billion. And perhaps the first widely reported short squeeze dated back a century, to 1923, when grocery magnate Clarence Saunders successfully decimated short sellers who had targeted his nascent chain of Piggly Wiggly grocery stores.

Dual Transformation: How to Reposition Today's Business While Creating the Future
by Scott D. Anthony and Mark W. Johnson
Published 27 Mar 2017

Total employment rose to almost 150,000, and its stock price increased fourfold between 2000 and 2015. But the forces of industry change are relentless. Revenues dipped from $21 billion in 2012 to $18 billion in 2015, and Xerox’s stock fell by almost 50 percent from January 2015 to January 2016. Later that year, influenced undoubtedly by pressure from activist investor Carl Icahn, Xerox announced plans to split into two companies: a business process-outsourcing company called Conduent, with 96,000 employees and $7 billion in revenue; and a copier and printer business, with 39,000 employees and $7 billion in revenue. The two offshoot businesses are individually more vibrant than either would have been a decade ago but no doubt will again confront the challenge of disruptive change in their respective markets.

Young Money: Inside the Hidden World of Wall Street's Post-Crash Recruits
by Kevin Roose
Published 18 Feb 2014

We both quit Goldman Sachs a week and a half ago and are coming off our first week working full-time. The decision to leave GS, I think, will prove to be one of the best of my life. Who knows where it will go, but it’s clear to me now that I should be in media, not finance. I don’t want to be a Carl Icahn or Bill Gross or Steve Schwarzman. I want to be an L. A. Reid, a Richard Branson, a Michael Jackson—where the shit I create will impact people forever. Real life is hard. I’m pretty sure I just made it harder. But I’m doing what I wanna do, not what “prestige” says I ought to be doing. GS is firmly a thing of my past, a memory that I never have to relive.

The Greed Merchants: How the Investment Banks Exploited the System
by Philip Augar
Published 20 Apr 2005

Even after the merger wave of the sixties, top advisers such as Morgan Stanley had only about four merger and acquisition specialist investment bankers.25 The senior partner of Goldman Sachs ‘would say that he was the original merger department, in the sense that the bottom left-hand drawer held the buyers and the bottom right-hand drawer the sellers’.26 There were only three hundred bulge bracket investment bankers in America in total in 1965 and only 1,500 in 1978.27 It was the leverage-based corporate raiders of the eighties such as Carl Icahn and Ronald Perelman and the mega-mergers of the nineties such as Travelers-Citicorp and Vodafone-Mannesmann that signified the arrival of mergers and acquisitions as a mainstream activity for the investment banks. In 1980 there were only 106 M&A deals announced in America and 97 in the rest of the world; in 1998, the peak year, there were nearly 12,000 in America and over 30,000 elsewhere.

The New Tycoons: Inside the Trillion Dollar Private Equity Industry That Owns Everything
by Jason Kelly
Published 10 Sep 2012

The wealth generated by realizing that vision has turned Rubenstein into one of the more prominent philanthropists during the past decade. He’s a signee of the Giving Pledge, the movement founded in 2010 to get wealthy people to commit to giving away at least half their money. Created by billionaires led by Warren Buffett and Bill Gates, the Pledge has drawn the support of families and individuals including investors Carl Icahn, Julian Robertson, and Ronald Perelman. Peter G. Peterson, the co-founder of Blackstone, is the only other founder of a big private-equity firm to sign the pledge. Rubenstein wrote a 1,400-word letter explaining his decision. In describing his path to philanthropy, Rubenstein wrote about realizing at age 54 that the average white male lived to be 81, meaning he was, statistically speaking, two-thirds through his life.

Frommer's Irreverent Guide to Las Vegas
by Mary Herczog and Jordan S. Simon
Published 26 Mar 2004

Casino Legends Hall of Fame contains the world’s largest collection of gambling-related objects, from Marilyn Monroe and Joe DiMaggio’s marriage license and a pair of Cassius Clay’s boxing gloves to mobster photos, videos of casino demolitions, matchbooks, dice, chips (over 13,000), and swizzle sticks. Hall of Fame inductees, each with an individual display, are enshrined in different sections: “Headliners” (the Rat Pack, Liberace, Wayne Newton, Shecky Greene, Engelbert Humperdinck), “Gamblers” (Amarillo Slim, Jay Sarno), and “Visionaries” (Benny Binion, Howard Hughes, Carl Icahn, Steve Wynn). UNLV’s Marjorie Barrack Museum explores the culture of the area’s natives and early settlers with breathtaking collections of Southern Paiute baskets, Navajo textiles, Hopi kachinas, Guatemalan huipils (blouses), and ceremonial masks from the Americas. Out at the Hoover Dam, visitor center exhibits detail the dam’s arduous 5-year construction (amazingly, completed ahead of schedule), along with Ripleylike factoids (didja know that Lake Mead could cover the state of Pennsylvania in a foot of water, or that all the concrete in the dam could pave an entire cross-continental highway?).

Disrupted: My Misadventure in the Start-Up Bubble
by Dan Lyons
Published 4 Apr 2016

Eighteen months after buying Skype, Andreessen and his partners sold the company to Microsoft for $8.5 billion—three times what they paid. To some, Andreessen’s role as both an eBay director and an investor acquiring an asset from eBay seemed like a problem. “Andreessen, he’s screwed more people than Casanova, for Christ’s sake, and yet he goes and takes this attitude that he’s on the high moral ground,” activist investor Carl Icahn said on CNBC. Icahn complained that eBay had sold Skype for less than what it was worth and that eBay’s investors had been shortchanged. Andreessen said Icahn was “making up a fake conspiracy theory out of thin air.” The tech press sided with Andreessen. The story went nowhere. Andreessen is relentlessly optimistic and pounds away on the same message, which is that no matter how high the valuations of start-ups might go, this all makes sense.

Underwater: How Our American Dream of Homeownership Became a Nightmare
by Ryan Dezember
Published 13 Jul 2020

They went looking for an investor to pair with, someone with deeper pockets than the doctors and dentists who had so far been funding their splurge. Treehouse had bought a few houses in Atlanta and California but needed many more properties in each market to make managing them cost-effective. Treehouse enlisted a young investment banker named Rich Ford to find a match on Wall Street. Ford approached Carl Icahn, the corporate raider and activist investor, and pitched the Carlyle Group, a $200 billion Washington, D.C., firm that had gained prominence privatizing government businesses and carving out unloved divisions from big corporations. Blackstone took a meeting. Jonathan Gray, the New York firm’s real estate chief, was mulling a move into single-family real estate, and his team was vetting rental operators for potential partnerships.

Volt Rush: The Winners and Losers in the Race to Go Green
by Henry Sanderson
Published 12 Sep 2022

He was enamoured by the giant Tenke Fungurume mine and decided to spend as much as possible to develop the deposit. A private runway was built and a highway to export copper and cobalt.7 But in 2015, commodity prices had plunged due to a weakening of demand in China and Adkerson was facing pressure from the billionaire New York-based activist investor Carl Icahn, who had become the largest shareholder of Freeport a year earlier. Icahn wanted the miner, which traced its roots to 1912, to reduce its debt levels, which had jumped to $20 billion after a series of ill-timed oil and gas acquisitions. Freeport’s shares were in free fall. During the LME week in late 2015 I watched as Adkerson took the stage, grabbed a microphone and sang ‘If you’re going through hell, Keep on going,’ a song by Rodney Adkins, at the Intercontinental Hotel in Park Lane.

The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America—and How to Undo His Legacy
by David Gelles
Published 30 May 2022

By the end of his tenure, the numbers of deals soared to upward of 14,000 a year, with a combined value of well over $1 trillion. Of the companies that were in the Fortune 500 in 1980, a full 143 of them—28 percent—had been acquired by the end of the decade. At the same time, corporate raiders were on the march. Men like Carl Icahn, T. Boone Pickens, and Nelson Peltz were raising money, mounting aggressive takeover campaigns against unsuspecting companies, and—once they had control—squeezing them for profits by cutting staff and slashing costs. When companies wouldn’t listen to their profit-hungry investors, the raiders would mount campaigns to replace directors, installing themselves or their cronies on the board, and then forcing the company’s hand.

Losing the Signal: The Spectacular Rise and Fall of BlackBerry
by Jacquie McNish and Sean Silcoff
Published 6 Apr 2015

Motorola “didn’t have the DNA or the people” to understand the software, former CEO Ed Zander told Chicago Magazine.10 By the time Balsillie came calling in the spring of 2008, Motorola was under seige. Motorola’s core mobile device sales were rapidly shrinking, tumbling nearly 40 percent in 2008 from the year before to $12.1 billion. Operating losses in the group, nearly doubled to $2.2 billion in the year, a humbling decline that prompted cantankerous shareholder activist Carl Icahn to wage a noisy battle to dismantle the company. Motorola’s misfortunes, Icahn complained in a public letter to shareholders, were the legacy of “blunders” by management. Under pressure, CEO Zander left the company, and its new chief, Greg Brown, was directed by Motorola’s board to explore a sale of its mobility business.

Liar's Poker
by Michael Lewis
Published 1 Jan 1989

To raid corporations, however, Milken needed a few hit men. The new and exciting job of invading corporate boardrooms appealed mainly to men of modest experience in business and a great deal of interest in becoming rich. Milken funded the dreams of every corporate raider of note: Ronald Perelman, Boone Pickens, Carl Icahn, Mar-vin Davis, Irwin Jacobs, Sir James Goldsmith, Nelson Peltz, Samuel Heyman, Saul Steinberg, and Asher Edelman. "If you don't inherit it, you have to borrow it," says one. Most sold junk bonds through Drexel to raise money to storm such hitherto unassailable fortresses as Revlon, Phillips Petroleum, Unocal, TWA, Disney, AFC, Crown Zellerbach, National Can, and Union Carbide.

Bezonomics: How Amazon Is Changing Our Lives and What the World's Best Companies Are Learning From It
by Brian Dumaine
Published 11 May 2020

On top of that, the small number of companies that master the AI flywheel will dominate globally, and their founders and shareholders will continue to rake in more than a fair share of global wealth. In the 1960s and 1970s, corporations tended toward a more balanced approach by taking into consideration the needs not only of their shareholders but also their employees and communities. The 1980s saw the advent of corporate raiders such as Carl Icahn, Victor Posner, and T. Boone Pickens, who put pressure on boards and management to run their corporations solely for shareholders. Since then, running a business to maximize returns for shareholders has become the modus operandi. Commonly, CEOs today will do whatever it takes—cutting R&D, firing employees, slicing benefits—to make the latest quarterly earnings, because if they don’t deliver, activist investors will find someone who will.

Chaos Kings: How Wall Street Traders Make Billions in the New Age of Crisis
by Scott Patterson
Published 5 Jun 2023

He was among the best-known hedge fund managers in America—a Master among Masters of the Universe—making his career on high-profile investments in name brands such as Starbucks and Wendy’s. When Ackman took a position in a stock, it was headline news. He was even better known for his bearish bets, such as a $1 billion short against Herbalife Nutrition, a health supplement company Ackman said was a pyramid scheme, a wager that pitted him against Carl Icahn—and that Ackman famously lost. As Ackman spoke, the market—already sharply lower for the day—tanked. It fell so quickly, trading was halted. When the market reopened, the Dow industrials were down more than two thousand points. The Guardian called Ackman’s performance “near-hysterical” and “doom-laden.”

The Golden Passport: Harvard Business School, the Limits of Capitalism, and the Moral Failure of the MBA Elite
by Duff McDonald
Published 24 Apr 2017

That excess capacity played a large part in what Jensen called the “capital market restructuring revolution of the 1980s.”2 Companies sitting on large piles of cash—and there were many, as before the 1980s, executives were loath to return money to shareholders—suddenly became the target of hostile acquirers. The age of investor capitalism had begun, and its heroes were not CEOs but corporate raiders like Carl Icahn and T. Boone Pickens. A wave of deregulation then created the active market for corporate control that critics of managerialism were calling for, with the new logic of shareholder primacy absolving managers of responsibility to any “stakeholder”—employees, communities, society itself—except shareholders.

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Sahlman, in October 2014, missing the point entirely. Ackman invites the calumny. Indeed, he seems to relish it. One can hardly look upon someone who compares a publicly traded company (Herbalife) to Enron, the mafia, and the Nazis—all in one sitting—as some sort of passive player in the whole stage drama that is investing. (Carl Icahn, equally loose-lipped but far more entertaining than Ackman, called the younger man “a liar” and a “crybaby” on television.32) “Mr. Ackman is no charlatan,” writes Andrew Ross Sorkin of the New York Times. “He genuinely believes what he says. But he also seems to be able to compartmentalize his views and rationalize his investment philosophy in contradictory ways.

Phishing for Phools: The Economics of Manipulation and Deception
by George A. Akerlof , Robert J. Shiller and Stanley B Resor Professor Of Economics Robert J Shiller
Published 21 Sep 2015

And those same lax regulations allowed the S&Ls to pay high enough rates of interest in deposits that they could have money to spare. So when Milken called with a new opportunity, the hint was taken seriously. By 1985 he could be so certain of closing a deal of eye-popping size that Drexel only needed to issue a letter saying that it was “highly confident” that it could do the financing. As demonstrated in Carl Icahn’s run on Phillips Petroleum, Milken was able to raise $1.5 billion in forty-eight hours.14 With such extraordinary powers, Milken and his men could take a targeted management by surprise. The raider could make his offer so quickly that the target had only hours for defense. It is worth remarking, more than parenthetically, that Milken also had additional ways, beyond junk-bond financing, to reward those who helped him with his deals.

The Dangerous Case of Donald Trump: 27 Psychiatrists and Mental Health Experts Assess a President
by Bandy X. Lee
Published 2 Oct 2017

Turning to President Trump’s social connections, an April 2017 article in the New York Times noted a “group of advisers—from family, real estate, media, finance and politics, and all outside the White House gates—many of whom he consults at least once a week” (Haberman and Thrush 2017). They include nine millionaires or billionaires (Thomas Barrack, Carl Icahn, Robert Kraft, Richard LeFrak, Rupert Murdoch, David Perlmutter, Steven Roth, Phil Ruffin, and Steve Schwarzman); the conservative television cable news host Sean Hannity; the conservative political strategists Corey Lewandowski and Roger Stone; Republican politicians Chris Christie, Newt Gingrich, and Paul Ryan; a financial lawyer, Sheri Dillon; President Trump’s sons; and his wife.

The Man Who Solved the Market: How Jim Simons Launched the Quant Revolution
by Gregory Zuckerman
Published 5 Nov 2019

Bannon outlined a series of ideas, including making Conway a more frequent presence on television to defend Trump. “That sounds like a terrific idea,” Mercer said. Later the same day, the Mercers boarded a helicopter to the East Hampton beachfront estate of Woody Johnson, the owner of the New York Jets, where GOP backers, including Wall Street investors Carl Icahn and Steve Mnuchin, were gathering to meet Trump. Clutching the Times story, Rebekah made a beeline for the candidate. “It’s bad,” Trump acknowledged. “No, it’s not bad—it’s over,” she told Trump. “Unless you make a change.” She told Trump she had a way for him to turn the election around.

The AI Economy: Work, Wealth and Welfare in the Robot Age
by Roger Bootle
Published 4 Sep 2019

Will the new robot- and AI-dominated future necessarily imply a large number of people on low pay and therefore a substantial increase in inequality? 6 Winners and losers “In the coming century or so, humanity will divide into two classes of people – the gods and the useless.” Yuval Harari1 “Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity.” Carl Icahn, billionaire2 So far, we have discussed the impact of robots and AI largely as though the effects fall equally on all people and parts of the world alike. That is clearly not true, and it is time to set the record straight. I will now discuss the effects on the distribution of income across different individuals, groups, regions, and countries, starting with individuals.

file:///C:/Documents%20and%...
by vpavan

"There was increased pressure on management to look after the interests of shareholders, because a raider could come along if the stock was too low," says Goldschmid, who would later become the SEC's general counsel. "On the other hand, there was a lot of funny money going around, and a lot of questionable people and motives involved." The raiders— people such as Carl Icahn, T. Boone Pickens, and Saul Steinberg— caused much bitterness, and not just among unhappy managers turned out of their corner offices. Dozens of acquired companies were broken up and sold in pieces, thousands of people were laid off, suppliers and customers were disrupted, and local communities were torn apart.

The Bond King: How One Man Made a Market, Built an Empire, and Lost It All
by Mary Childs
Published 15 Mar 2022

A totally unproductive use of money, especially given that many of those activists ran hedge funds that were open only to sophisticated investors, so they were bullying companies to funnel profits to the already rich. Something about that didn’t sit right. One day in late October, as the notoriously pugnacious activist Carl Icahn was loudly pushing Apple to buy back stock, which would inflate the price of shares he held, Gross snapped. “Icahn should leave #Apple alone & spend more time like Bill Gates,” Gross tweeted on October 24. “If #Icahn’s so smart, use it to help people not yourself.” Icahn took the bait. “To Bill Gross @PIMCO,” he tweeted on October 28, “If you really want to do good, why not join givingpledge.org like Gates, I and many others have?”

Security Analysis
by Benjamin Graham and David Dodd
Published 1 Jan 1962

Ultimately, Texaco is most significant as an example of the use of the Bankruptcy Code as an escape hatch, to evade legal or contractual liabilities.4 Distressed investing generally involves buying debt instruments of a troubled company, because in most bankruptcies the equity is wiped out. That is not always the case, however, and sometimes an astute investor can find riches in the equity of a distressed company, as demonstrated by Carl Icahn in the case of Texaco. Here’s what led the oil giant to bankruptcy. In 1984, Texaco acquired Getty Oil Company, but it was sued by Pennzoil, which contended that Texaco had interfered with its prior contract to buy part of Getty. The following year, a jury determined Texaco was wrong and awarded Pennzoil $10.3 billion.

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(p. 230) By illuminating bankruptcy, they made it not so scary. This change in perceptions is not to the discredit of the authors. Indeed, they probably were indispensable to the shift, in light of their role in educating the investing public. Call it the Graham and Dodd Heisenberg effect. In light of Graham and Dodd, the game shifted, all the way to Carl Icahn. The effect may be similarly present in the authors’ relatively concise discussion of distressed investing. Their brevity is readily understandable not only because the field has grown since Graham and Dodd published but because the themes sounded throughout their work are inherently applicable to this mode, such that dedicating a chapter to distressed investing as such would have been nearly superfluous.

Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America
by David Callahan
Published 9 Aug 2010

Corporate values shifted sharply in the 1980s, the “greed is good” era in which vast pay inequities and frequent downsizing became normalized. Conspicuous consumption by corporate chieftains and Wall Street big shots—frowned on in the early postwar decades—returned on a grand and gaudy scale. The new business stars of the moment were brash figures unembarrassed by their mean streaks, such as Donald Trump and Carl Icahn. Milton Friedman’s argument—that profit was the overriding goal of corporate leaders—was taken to its logical extreme in a wave of leveraged buyouts in which entire companies were dismantled and communities devastated for the sake of short-term shareholder gains. The notion that business had a wider set of responsibilities was increasingly seen as quaint, if not grounds for a hostile takeover by raiders purporting to act on behalf of shareholders.

The Quants
by Scott Patterson
Published 2 Feb 2010

He’d recently roped Asness into a private high-stakes poker game played with several other traders and hedge fund hotshots in ritzy Manhattan hotel rooms. The game had a $10,000 buy-in, couch cushion change to topflight traders such as Asness and Muller. The quants ran the private poker game, but more traditional investment titans joined in. Carl Icahn, the billionaire financier who’d gotten his start on Wall Street with $4,000 in poker winnings, was a regular. So was Marc Lasry, manager of Avenue Capital Group, the $12 billion hedge fund that would hire former first daughter Chelsea Clinton later that year. Lasry was known for being a cool investor whose icy demeanor belied his let-it-roll mentality.

The Boom: How Fracking Ignited the American Energy Revolution and Changed the World
by Russell Gold
Published 7 Apr 2014

The new Chesapeake, he went on, would be “simpler . . . we have what we own, and we are happy with what we own.” At the end of his short remarks, he mentioned the public drubbing his handpicked board members had just received, saying, “We will be studying the results of the vote today and see what else needs to be done.” After he spoke, Vincent Intrieri took the microphone. He worked for Carl Icahn, a well-known activist investor with a reputation for acquiring shares in a company and forcing change. Icahn had been buying Chesapeake shares for several weeks. Intrieri was in his midfifties. He wore an expensive suit and eyeglasses, the uniform of a powerful capitalist. “We believe Aubrey that you are a great oil and gas man,” he said, “but even great leaders need oversight.”

Black Edge: Inside Information, Dirty Money, and the Quest to Bring Down the Most Wanted Man on Wall Street
by Sheelah Kolhatkar
Published 7 Feb 2017

Newman Changes the Law,” K&L Gates LLP, May 3, 2015. 1. MONEY, MONEY, MONEY Established in 1880, Gruntal had survived: Richard Behar, “The Shabby Side of the Street,” Fortune, March 3, 2003. Aizer had implemented a strategy called “option arbitrage”: The options department at Gruntal had been started in 1964 by Carl Icahn. Icahn and Aizer, and Cohen for that matter, had much in common. Even though Icahn was several years older than Aizer, they were all kids who’d spent their youths admiring the skyline of Manhattan from the outer boroughs and plotting to triumph over their middle-class upbringings. At the time, if someone wanted to trade a stock option, they had to call up a broker at Gruntal or a handful of other firms, explain what kind of bet they wanted to make and over what time horizon, and basically accept whatever price they were given.

Transaction Man: The Rise of the Deal and the Decline of the American Dream
by Nicholas Lemann
Published 9 Sep 2019

Within a few years, he had become the leading public advocate and justifier of a number of new techniques in the financial world that suddenly became pervasive: a large increase in mergers and acquisitions, including hostile ones; the development of the junk-bond market, whose high-risk, high-return instruments often financed these activities; enormous raises in the compensation of corporate chief executives, often in the form of stock options; the onset of leveraged buyouts and private equity as ways for financiers to take direct, usually temporary control of formerly publicly held companies. For a new coterie of raiders and financiers of a type Adolf Berle could hardly have imagined—Carl Icahn and Michael Milken, T. Boone Pickens and Irwin Jacobs—Jensen was the provider of the accompanying public philosophy, the scholar who could explain why their techniques were good for America. Between 1981 and 1983 alone, there were more than two thousand corporate takeovers a year valued at more than $1 million, far more than the country had ever seen, enabled in part by Ronald Reagan’s new administration in Washington signaling that it was going to interpret the antitrust laws more loosely.

The Investment Checklist: The Art of In-Depth Research
by Michael Shearn
Published 8 Nov 2011

For example, here are just a few successful acquirers: Brookfield Asset Management; Penn National Gaming; Cisco; Danaher; and Berkshire Hathaway. The CEOs of these businesses are willing to walk away from a deal if they believe they are about to pay too much. For example, at Penn National Gaming, CEO Peter Carlino did not get into a bidding war with investor Carl Icahn to buy the unfinished Fountainbleau Resort in Las Vegas because he felt he would be paying too much if he offered a higher price. As Carlino said (during a quarterly conference call), “We hit our limit of where we wanted to go and then walked away. Buying properties at full price at high multiples is like treading water.

Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry
by Steven Rattner
Published 19 Sep 2010

Free of crippling costs and debts, this new business would go forth as a streamlined, revitalized competitor on the world automotive scene. We meant it to be not only viable but also highly profitable. The meeting ended at 6 P.M., having stretched nine hours. Even though it was Friday night, Harry didn't stop; he had booked a session with Carl Icahn, the legendary corporate raider and multibillionaire, who had lately expressed interest in acquiring a stake in Delphi. Icahn's offices were a couple of elevator rides away, on the forty-seventh floor. Matt dutifully accompanied Harry on the short journey, but was soon called back to Connecticut over a family matter.

What Happened to Goldman Sachs: An Insider's Story of Organizational Drift and Its Unintended Consequences
by Steven G. Mandis
Published 9 Sep 2013

For example, I worked on a team that advised AT&T on combining its broadband business with Comcast in a transaction that valued AT&T broadband at $72 billion. I also helped sell a private company to Warren Buffett’s Berkshire Hathaway. As the head of Goldman’s unsolicited take-over and hostile raid defense practice, I worked on a team advising a client involved in a proxy fight with activist investor Carl Icahn. When I joined Goldman, partnership election at the firm was considered one of the most prestigious achievements on Wall Street, in part because the process was highly selective and a Goldman partnership was among the most lucrative. The M&A department had a remarkably good track record of its bankers being elected—probably one of the highest percentages of success in the firm at the time.

Targeted: The Cambridge Analytica Whistleblower's Inside Story of How Big Data, Trump, and Facebook Broke Democracy and How It Can Happen Again
by Brittany Kaiser
Published 21 Oct 2019

There was pundit Scottie Nell Hughes, TV and radio host Laura Ingraham, the muscle-bound SNL alum Joe Piscopo, former VP candidate Sarah Palin, and even the MyPillow guy, Michael Lindell. The video-blogging duo Diamond and Silk chatted with the infamous “apprentice” Omarosa Manigault, and a bevy of billionaires (David Koch, Carl Icahn, Wilbur Ross, Harold Hamm, and Andy Beal) stood around in a huddle. Iowa congressman Steve King and Jerry Falwell Jr. kibitzed. And Trump advisers Sarah Huckabee Sanders, Rudy Giuliani, and Roger Stone, and Senator Jeff Sessions somberly drank their cocktails. The earliest projections came in at around 7:00 p.m.

The Missing Billionaires: A Guide to Better Financial Decisions
by Victor Haghani and James White
Published 27 Aug 2023

It turned out that if he had stayed fully invested in the stock, he'd have been in for a white‐knuckle roller coaster ride, as the stock rallied about 40% right after the IPO but then sank about 20% over the rest of the year, for a total return of just 12%. He would have made more money keeping 90% invested in the stock over the year, but Iggy appreciated that at the time he made the decision he had to factor in the risks he was taking and felt good about his decision. In late 2007 the billionaire investor Carl Icahn faced a similar decision with an investment he made in a start‐up, Sandridge Energy, which specialized in fracking technology. Icahn was advised that the IPO was going to go very well, but that if he didn't sell in the IPO, he'd have to hold for 6 months. He decided the risk of 6 months holding a very volatile stock outweighed the probable benefit of the IPO pop, and he sold at the IPO price of $18 per share.

The Quest: Energy, Security, and the Remaking of the Modern World
by Daniel Yergin
Published 14 May 2011

The companies secretly dispatched teams to rendezvous in Scottsdale, Arizona. After several days, they concluded that the fit would be excellent. But this would be no merger of equals. Texaco had gone through difficult times. It had lost a $3 billion lawsuit to an independent oil company, Pennzoil, and then, to fend off a hostile takeover from the financier Carl Icahn, it had taken on billions more in debt. As a result, it had to sell its Canadian subsidiary and slash its exploration budget, which would have painful consequences. “It’s a pretty simple rule,” said William Wicker, then CFO of Texaco. “If you cut your exploration budget in Year Zero, you’re not growing in Year Seven and Eight.”

…

The second was the danger of being absorbed in a hostile takeover. Phillips faced the same risks. And these were not theoretical risks. After all, the reason Conoco had fallen into DuPont’s arms in 1981 was to ward off hostile bids. And later in the 1980s, Phillips had been the target of hostile tenders by both T. Boone Pickens and Carl Icahn. And, thus, Dunham and Phillips’s CEO, James Mulva, had begun discussing a possible combination in 2000. But the talks had foundered in October 2000. Instead, the two companies went head to head as finalists in bidding for the Alaskan assets that BP and ARCO had to shed in order to consummate their merger.

A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers
by Lawrence G. Mcdonald and Patrick Robinson
Published 21 Jul 2009

Unlike me, who had nothing and was officially associated with one of the least attractive bucket shop gangs on the East Coast. Whether or not that Series 7 was a top priority or just a distant mountain to be climbed made no difference. One by one my new Wharton buddies came and asked to see the study book, especially my pal and roommate Rick Schnall, a nephew of Carl Icahn, the most famous corporate raider on Wall Street, the Muhammad Ali of his trade. It was a big help being among guys like that, because when everyone is involved in the same subject, with similar insights and perceptions, the sheer velocity of the available information is ratcheted up a few notches.

Jennifer Morgue
by Stross, Charles
Published 12 Jan 2006

But you can imagine the threat we posed to the inefficient state monopolies like the British Aircraft Corporation, the coal mining industry, and Imperial Chemical Industries." Blofeld paused to sip his tea thoughtfully. "We were ahead of our time in many ways. We pioneered business methods that later became mainstream — Sir James Goldsmith, Ronald Perelman, Carl Icahn, they all watched us and learned — but by then, the commies were out of power in the West thanks to our friends in the establishment, so they had an easier time of it. No need to hire lots of expensive security and build concrete bunkers on desert islands! And yes, that made us look bad, don't think I'm unaware of it — but you know, you want bunkers and isolated jungle rocket-launch bases?

How Markets Fail: The Logic of Economic Calamities
by John Cassidy
Published 10 Nov 2009

Galbraith’s analysis proved poorly timed. Subsequent decades saw the rise of globalization and the removal of import restrictions, which left much of American manufacturing—from autos to textiles to toys to furniture to steel to chemicals—struggling to fend off foreign competition. Meanwhile, the rise of corporate raiders such as Carl Icahn and T. Boone Pickens, and leveraged buyout conglomerates such as Kohlberg Kravis Roberts and Texas Pacific, created an active market in the ownership of blue-chip companies. The cosseted top executives of Fortune 500 companies found their positions and perquisites of office under threat. The demise of the megacorporation shouldn’t be overstated, though.

The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street
by Justin Fox
Published 29 May 2009

When Reagan’s SEC chairman began worrying loudly in 1984 about the dangers of takeovers, Treasury Secretary Donald Regan, the former CEO of Merrill Lynch, made the administration’s position clear by stating that takeovers were “beneficial” as “they provide a means—sometimes the only feasible means—of policing management in widely held corporations.”35 A few months later, the annual Economic Report of the President included a whole chapter titled “The Market for Corporate Control”—written by a product of Chicago’s Economics Department—that was simply an updated version of Manne’s seminal 1965 article.36 The 1980s takeover boom did end eventually, shut down by state legislatures immune to Chicagoan reasoning, a U.S. attorney in Manhattan (Rudy Giuliani) intent on bringing down some big Wall Street names, and the crash of the junk bond market. But the power of Manne’s arguments helped delay this fate for nearly a decade, during which buyout firm Kohlberg Kravis Roberts & Co., lone rangers Nelson Peltz and Carl Icahn, and others like them transformed the economic landscape. They accomplished this transformation with what to many seemed like great brutality and waste. By the late 1980s, many worried commentators were arguing that while Japan and Germany built up their industrial might, U.S. corporations were being forced by the takeover wave to shutter factories and load up on debt.

Principles of Corporate Finance
by Richard A. Brealey , Stewart C. Myers and Franklin Allen
Published 15 Feb 2014

By monitoring to protect its loan, the bank generally protects shareholders’ interests also.8 Shareholders Shareholders also keep an eagle eye on the company’s management and board of directors. If they believe that the corporation is underperforming and that the board is not holding managers to task, they can attempt to elect representatives to the board to make their voices heard. For example, in 2011 billionaire shareholder activist Carl Icahn believed that the management of Oshkosh was not acting in the shareholders’ interest when it did not pursue a merger with fellow vehicle manufacturer Navistar. He therefore purchased nearly 10% of the stock of each company, and nominated six associates for election to the Oshkosh board. Smaller stockholders cannot justify the time or money for a proxy battle.

…

When Disney shareholders voted 43% of the shares against the reelection of Michael Eisner, the company’s autocratic chairman, he heard the message and resigned the next day. The threat of a proxy fight may also encourage management to change company policy. For example, in 2008 shareholder activist Carl Icahn indicated his intention to put himself forward for nomination to the board of Motorola. However, Icahn controlled less than 7% of the votes and failed to prevent the reelection of the existing board. Nevertheless the pressure from Icahn had an effect: Motorola agreed to nominate two new board members and, at Icahn’s urging, spun off its handset division as Motorola Mobility.21 Takeovers The alternative to a proxy fight is for the would-be acquirer to make a tender offer directly to the shareholders.

…

Spin-offs A spin-off (or split-up) is a new, independent company created by detaching part of a parent company’s assets and operations. Shares in the new company are distributed to the parent company’s stockholders.12 We came across one recent example in the last chapter, where we saw how Motorola was pressured by Carl Icahn into spinning off Motorola Mobility. Motorola’s shareholders received shares in the new company and could trade their Motorola Mobility shares as well as those of the slimmed-down Motorola Solutions. Motorola was not alone in wanting to split up. Other spinner-offers in 2011–2012 include Abbott Laboratories, Marathon Oil, McGraw-Hill, Kraft, Fortune Brands, ITT, Hewlett-Packard, and Sara Lee.13 Spin-offs widen investor choice by allowing them to invest in just one part of the business.

The Last Tycoons: The Secret History of Lazard Frères & Co.
by William D. Cohan
Published 25 Dec 2015

Not only did Drexel underwrite these bonds for corporations that could not get financing from more traditional sources--banks, insurance companies, and the public-equity markets--but also Milken pioneered the use of these securities to finance the huge financial ambitions of corporate raiders, like Carl Icahn and T. Boone Pickens, and of LBO firms, such as Kohlberg Kravis Roberts. Before long, the unknown firm of Drexel Lambert was both advising and financing these raiders and LBO firms in their acquisition sprees. Drexel was reaping huge fees as a result. Lazard's lackluster response to Milken was to have Felix protest loudly (and correctly) about his villainy and await his demise.

…

Lucy Jane, Wendy's young daughter, who was born in 1999 with the help of fertility treatments and raised by Wendy alone, now lives with Bruce and his family at 927 Fifth Avenue. THE BEGRUDGING ACCOLADES for Bruce keep coming despite the valid criticism he received in some circles for agreeing to represent, in late November 2005, the billionaire corporate raider Carl Icahn and a group of dissident Time Warner shareholders--who together owned some 3.3 percent of the company--in their very public battle to try to boost Time Warner's long-beleaguered stock price by either pushing out the CEO, Dick Parsons, or breaking up the company, or both. Lazard was hired to analyze various strategic alternatives, find a slate of candidates to run as replacement board members at Time Warner, and make recommendations to Icahn and his group.

Inflated: How Money and Debt Built the American Dream
by R. Christopher Whalen
Published 7 Dec 2010

Even after the gold market crisis, Gould continued to operate with impunity, manipulating stocks such as the Pacific Mail Steamship Company to great profit. Memorialized as “The Mephistopheles of Wall Street,” Gould reportedly took $5 million out of his speculations in Pacific Steamship in the early 1870s, a return that in modern terms ranks with that of corporate raiders such as Carl Icahn and Kirk Kerkorian.33 Gould was hardly alone among the great investment operators of the age, including Jay Cooke and his Northern Pacific Railroad. Gould’s next operation, taking over the Union Pacific Railroad, allowed him to manipulate upward the prices on railroad freight rates in the West and begin a long period of accumulating equity positions in several major rail lines.

Wall Street: How It Works And for Whom
by Doug Henwood
Published 30 Aug 1998

That the inefficiencies were in fact just as we had seen them in theory, but the markets took a while to adjust. That adjustment is still taking place." GOVERNANCE Jensen especially celebrated LBOs engineered by boutiques like Kohlberg Kravis Roberts (KKR) and Clayton & Dubalier; "entrepreneurs" like Carl Icahn, Ronald Perelman, Irwin Jacobs, and Warren Buffett; merchant banking arms of Morgan Stanley and Lazard Freres; and families like the Pritzkers and Bronfmans. These fine people — the forgotten stars of the largely forgotten 1980s — should be trusted to run corporate America like a stock portfolio, from their thinly staffed (20 to 60 people) home offices, transforming the industrial cities of yesteryear into ghost towns.

Trend Following: How Great Traders Make Millions in Up or Down Markets
by Michael W. Covel
Published 19 Mar 2007

On top of that example, some of the best names on Wall Street (nontrend followers) have had tough sledding in 2008: Warren Buffett (Berkshire Hathaway): –43 percent Ken Heebner (CMG Focus Fund): –56 percent Harry Lange (Fidelity Magellan): –59 percent Bill Miller (Legg Mason Value Trust): –50 percent Ken Griffin (Citadel): –44 percent Carl Icahn (Icahn Enterprises): –81 percent T. Boone Pickens: Down $2 billion since July 2008 Kirk Kerkorian: Down $693 million on Ford shares alone Drawdowns happen. The key is to determine how quickly and successfully you can recover and get back to making new money again, but a comparison between trend trading drawdowns and buy and hold drawdowns doesn’t seem to be much of a comparison.

Connectography: Mapping the Future of Global Civilization
by Parag Khanna
Published 18 Apr 2016

Prominent American economists such as Robert Gordon of Northwestern and Tyler Cowen of George Mason argue that the U.S. economy is plagued by falling productivity gains, poor infrastructure, a technological innovation plateau, declining education standards, and rising inequality; its transportation system remains too slow and inefficient to meet its export targets. And yet, deeper capital investment is the largest source of productivity growth in the U.S. economy. After decades of neglect, crucial infrastructures are now being upgraded and expanded. The investors Warren Buffett and Carl Icahn are reviving the commercial freight rail industry, and Google is rolling out fiber with speeds of a thousand megabits per second in dozens of cities nationwide. With Congress unwilling to spend on infrastructure as it did in the 1950s, only opening up the floodgates to more foreign investment can provide the capital infusion needed to put Americans to work on this project of generational renewal.

More: The 10,000-Year Rise of the World Economy
by Philip Coggan
Published 6 Feb 2020

They then went on a lending spree that ended in disaster when interest rates rose and borrowers failed to repay; all told, institutions with a net worth of $519bn collapsed.29 Lower rates seemed to do the trick for a while; the US economy grew in 1988 and 1989 and the stock market rebounded from its temporary slump. Corporate takeovers, often using borrowed money, were widespread in the 1980s and 1990s. A series of predators, like T. Boone Pickens, Carl Icahn and Ivan Boesky, made headlines by taking significant stakes in businesses in a practice known as “greenmail”; either the existing management would buy them out at a profit, or another predator would use their stake as the basis of a deal. The process was dramatised in the film Wall Street, in which Michael Douglas’s character, Gordon Gekko, proclaims that “Greed is good.”

All the Devils Are Here
by Bethany McLean
Published 19 Oct 2010

Most of all, Levy subscribed to Weinberg’s lifelong belief that acting ethically on behalf of its clients was the single most important thing Goldman Sachs did. Anything that created even the appearance of a conflict with its clients was not just discouraged, but forbidden. That’s why, for instance, when corporate raiders like Carl Icahn and T. Boone Pickens began their takeover attempts in the late 1970s, Goldman refused to advise them, despite the substantial fees they were paying. The hostile takeover movement, the firm believed, was not in the best interest of its corporate clients. A few years after Levy died, in 1976, one of his successors, John Whitehead, set down a list of Goldman’s fourteen business principles.

WTF?: What's the Future and Why It's Up to Us
by Tim O'Reilly
Published 9 Oct 2017

Author Douglas Rushkoff told me the story of one Fortune 100 CEO who broke down in tears as she told him how her attempts to inject social value into decision making at her company had resulted in quick punishment by “the market,” forcing her to reverse course. Who is the market? It is algorithmic traders who pop in and out of companies at millisecond speed, turning what was once a vehicle for capital investment in the real economy into a casino where the rules always favor the house. It is corporate raiders like Carl Icahn (now rebranded as a “shareholder activist”) who buy large blocks of shares and demand that companies that wish to remain independent instead put themselves up for sale, or that a company like Apple disgorge its cash into their pockets rather than using it to lower prices for customers or raise wages for workers.

The History of the Future: Oculus, Facebook, and the Revolution That Swept Virtual Reality
by Blake J. Harris
Published 19 Feb 2019

Xoxo As with Nimble America’s original announcement earlier that day, Yiannopoulos’s post was largely met with anger and annoyance, ranging from comments like “Fuck off with the money grab” to “Love you Milo but you’re hardly ever here except when it helps you and nobody else.” The NimbleRichMan post, however, was better received, inspiring many members of the community to speculate on his identity (and whether or not he really existed). Several theories were thrown out—Peter Thiel, being the most popular, but Elon Musk and Carl Icahn were also in the mix. Ultimately, however, community members seemed less interested in who this individual was than why, if he really were a member of the 0.001 percent, he felt compelled to hide his identity. That seemed cowardly. Why wouldn’t he proudly step forward as a Trump supporter? [–]NimbleRichMan I can only answer your question with a question: Where are all the wealthy, powerful, and publicly identifiable Trump supports?

The Asylum: The Renegades Who Hijacked the World's Oil Market
by Leah McGrath Goodman
Published 15 Feb 2011

I walked into his office in New York and I told him, ‘I’ll work for you for free.’ ” Instead, Glass got paid $54 a week and received an in-the-trenches education from Filer and the other traders at Filer, Schmidt & Co., the largest stock-options dealer in the country. Glass was hooked. He eventually got his high school equivalency diploma in 1964, at the plaintive urgings of his mother. “In four years, I became a stockbroker specializing in puts and calls,” he says. “I was one of the biggest in the city, in the top three next to Carl Icahn, who I still talk to sometimes. He was the largest one. Then I became a member of every exchange I could get into. It was hard transitioning from stocks to commodities at first. A lot of people can’t do it. Commodities move much faster than stocks. It got so bad I even drove a cab for a while. But once I figured it out, it was amazing.

The Third Pillar: How Markets and the State Leave the Community Behind
by Raghuram Rajan
Published 26 Feb 2019

Workers take a large hit, though, and they, as well as future employees in the industry, may forever lose trust in management. Harvard economists Andrei Shleifer and Larry Summers emphasized this point in the context of airline takeovers in the 1980s, after the industry was deregulated. When corporate raider Carl Icahn took over Trans World Airlines (TWA) in 1985, they argue that much of the value he squeezed out for shareholders came from abrogating wage agreements and renegotiating worker wages down.42 To the extent that workers were overpaid because of lax prior management and strong union bargaining, this was beneficial for shareholders, but unless lower costs led to lower ticket prices and more travel, this was a wash for society since no additional value was created.

Bill Marriott: Success Is Never Final--His Life and the Decisions That Built a Hotel Empire
by Dale van Atta
Published 14 Aug 2019

Las Vegas was suddenly at the epicenter of the 2008 housing and building crash. “It was a bloodbath,” Bryan said. The $3.1-billion Fontainebleau Hotel under construction in Las Vegas, of a similar size to the one envisioned by Marriott, filed for bankruptcy in mid-2009 when it was 70 percent built. Billionaire Carl Icahn later bought it at auction for $150 million. That would have been Marriott’s fate also. Never again did Bill venture into gambling, and Marriott remained the only giant hotelier in the United States without casinos. No matter how many hotels were added to the Marriott stable, and no matter how old he was, Bill was determined to go to most of the full-service hotel openings and continue his inspection visits of 100 to 200 hotels each year.

In Pursuit of Privilege: A History of New York City's Upper Class and the Making of a Metropolis
by Clifton Hood
Published 1 Nov 2016

Meinig, The Shaping of America, 4: 247–87; New York Times, April 24, 2002, March 31 and May 20, 2004, April 6 and September 26, 2007, June 18, 2011; and Wall Street Journal, November 11, 2011. 52. The wealthiest five New Yorkers from Forbes’s 2009 list were Michael R. Bloomberg, who attained his wealth in financial news services before becoming mayor in 2001; David R. Koch (petroleum and gas); Carl Icahn (leveraged buyouts); Ronald Perelman (leveraged buyouts); and John Paulson (hedge funds). “The Forbes 400 Richest Americans 2009,” Forbes. The Upper East Side remains the single wealthiest neighborhood in the country and Greenwich, Purchase, and Bedford Hills are among its wealthiest suburbs. Internal Revenue Service, Statistics of Income, SOI Tax Stats: Top Wealthholders by State of Residence, accessed January 13, 2012, www.irs.gov/uac/SOI-Tax-Stats-Top-Wealthholders-by-State-of-Residence. 53.

Circle of Greed: The Spectacular Rise and Fall of the Lawyer Who Brought Corporate America to Its Knees
by Patrick Dillon and Carl M. Cannon
Published 2 Mar 2010

At his zenith, in 1986, Milken awarded himself $550 million in bonuses, more than the yearly profit for Drexel Burnham Lambert, the 10,000-person company that employed him. Milken’s operation was handling 250,000 transactions a month and controlling as much as $10 billion in funds through junk bonds issued by nearly one thousand companies. Through this market rose a new breed of risk takers—corporate raiders Henry Kravis, Carl Icahn, Ron Perelman, Saul Steinberg, and T. Boone Pickens; Rupert Murdoch, the global media baron; William McGowan, who made MCI one of the nation’s premier phone systems; Ted Turner, who created twenty-four-hour cable news; Frank Lorenzo, the airline takeover king—and, of course, Charlie Keating. Bill Lerach would sue them all, starting with Keating.

Buffett
by Roger Lowenstein
Published 24 Jul 2013

Many of them forked over greenmail, a bribe (paid from the pockets of their shareholders) to induce the raiders to go away and leave the CEOs their jobs. Even big companies, such as Walt Disney (greenmailed by Saul Steinberg), were cowed into paying up. Others, such as Phillips Petroleum, bedeviled by Carl Icahn, were so intent on making themselves unattractive to the bad guys that they went deeply into debt, wrecking their own balance sheets before the raiders could do it to them. This strange game presented an opening for Buffett. He was hearing from quite a few CEOs that they were under siege.14 It occurred to Buffett that Berkshire could make an attractive baby-sitter.

Unreal Estate: Money, Ambition, and the Lust for Land in Los Angeles
by Michael Gross
Published 1 Nov 2011

Through the mideighties, he quietly played a large role in financing their bids to take over several companies, including Crown Zellerbach, Goodyear, and BAT Industries (aka British American Tobacco), which owned not only big cigarette brands, but also a number of major American retailers, including Saks Fifth Avenue and, ironically, Marshall Field. Field also invested with T. Boone Pickens and Carl Icahn. In 1984, Field made another key hire at Interscope, bringing in Robert Cort (who’d left Fox when Marvin Davis took over) as president of Interscope’s entertainment division, replacing his original partner, whom he reportedly bought out for $1 million. Their split resulted in part from Field’s wandering eye for women.

740 Park: The Story of the World's Richest Apartment Building
by Michael Gross
Published 18 Dec 2007

Thomas, Barry Thomson, David Thorne, Ed Thorne, Francis Thorne, Julia Stimson Thorne, Landon Thorne, Peter Thorne, Cari Tio, Carlo Toresani, Jim Torpe, Bob Torre, Yvonne and Alberto Uribe, Diane van Amerongen, Hope van Beueren, Joan van Clefe, Anne van den Bergh, William vanden Heuvel, Anthony Gambrill Villa, Peter Villa, Elliott Vose, Carroll Wainwright, Anne Walton, Marshall Webb, David Weir, Catherine Whalen, Katharine Brewster Whipple, Joan Whiteman, Sue Wild, John Wilmerding, John Winslow, Barbara Swain Wittman, Cathy Yandell, Will Zeckendorf, William Zeckendorf Jr., Martin Zimet, Stanford and Eve Zimmerman, and Harvey Zimond. NOTES INTRODUCTION Steinberg wasn’t the only original greenmailer. In the 1980s, T. Boone Pickens Jr., Irwin Jacobs, and Carl Icahn were also credited with initiating the hardball tactic. The cooperative corporation owns the property, takes out a mortgage on the building, and pays the taxes, but the tenant-shareholders get the tax deductions for interest payments on the mortgage, again, proportional to the number of shares they hold.

Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers
by Timothy Ferriss
Published 6 Dec 2016

This reminded me of something I’ve heard from many adept meditators (such as Russell Simmons) in various forms: “If you don’t have 20 minutes to delve into yourself through meditation, then that means you really need 2 hours.” Four Commonalities Across the Best Investors Tony has interviewed and developed friendships with some of the best investors in the world, including Paul Tudor Jones (who he’s coached for more than 10 years), Ray Dalio, Carl Icahn, David Swensen, Kyle Bass, and many more. These are the hard-to-interview “unicorns” who consistently beat the market, despite the fact that it’s called impossible. Tony wrote a book based on his learnings (Money: Master the Game), and here are few of the patterns he identified: Capping the downside: “Every single one of those [people] is obsessed with not losing money.

Too big to fail: the inside story of how Wall Street and Washington fought to save the financial system from crisis--and themselves
by Andrew Ross Sorkin
Published 15 Oct 2009

Given his stature within the industry and what he was about to say—and considering the firepower of the investors in the audience—he could easily rattle the markets, especially Lehman’s shares. As investor events go—and there are many—this was one that genuinely mattered. The hedge fund industry is famously reclusive, but today the key players in the field were in attendance, the auditorium packed with industry titans such as Carl Icahn, Bill Miller, and Bill Ackman. By some estimates, the guests in the audience that day had more than $500 billion under management. From the stage’s corner, Einhorn watched as his warm-up act, Richard S. Pzena, a successful value investor, was apparently finishing his speech, having run over his time allotment as he offered his big investment idea to the audience.

On the Edge: The Art of Risking Everything
by Nate Silver
Published 12 Aug 2024

,” The Washington Post, September 26, 2016, washingtonpost.com/politics/2016/live-updates/general-election/real-time-fact-checking-and-analysis-of-the-first-presidential-debate/fact-check-has-trump-declared-bankruptcy-four-or-six-times; Associated Press, “Trump Entertainment Resorts File for Bankruptcy in Blow to Atlantic City,” The Guardian, September 9, 2014, sec. World News, theguardian.com/world/2014/sep/09/trump-casinos-atlantic-city-bankruptcy; Wayne Perry, “Trump’s Bankrupt Taj Mahal Casino Now Owned by Carl Icahn,” The Spokesman-Review, February 26, 2016, spokesman.com/stories/2016/feb/26/trumps-bankrupt-taj-mahal-casino-now-owned-by-carl. GO TO NOTE REFERENCE IN TEXT considerably enrich himself: Russ Buettner and Charles V. Bagli, “How Donald Trump Bankrupted His Atlantic City Casinos, but Still Earned Millions,” The New York Times, June 11, 2016, sec.

The House of Morgan: An American Banking Dynasty and the Rise of Modern Finance
by Ron Chernow
Published 1 Jan 1990

Investment banks were the agents for the global integration of markets, much as they had welded together national markets in the era of Pierpont Morgan. But too many deals seemed to be hatched by investment banks and corporate raiders merely for self-enrichment. The prototypical 1980s raiders—Boone Pickens, Carl Icahn, and Sir James Goldsmith—talked self-righteously about “cleansing” or “liberating” companies from “entrenched management.” They claimed target companies were the victims of a harsh, Darwinian necessity, implying that they were invariably poorly run companies. Yet in 1978, before this became the party line, Bob Greenhill had said, “The acquiring companies are not simply looking for bargains, or corporations in trouble.

The Prize: The Epic Quest for Oil, Money & Power
by Daniel Yergin
Published 23 Dec 2008

That, of course, could have happened to any of the major oil companies in the feverish climate that followed the oil shocks of the 1970s. But Gulf paid the ultimate price.[10] Shareholders' Value Pickens was not yet through. In rapid fire, he made bids for both Phillips, in Bartlesville, Oklahoma, and Unocal, in Los Angeles. On Phillips, he was trailed by an aggressive Wall Street financier, Carl Icahn, who had already bagged Trans World Airlines. Both companies, however, successfully fought off the takeover attempts through the courts and by assuming a great deal of debt, which enabled them to buy back stock at a much higher price than had been the case before the attacks, thus increasing the payout to shareholders.