Carl Icahn is a legendary figure in the business world. Emerging as a symbol of the bare-knuckled 1980s corporate environment, Icahn has become known for his activist investing style, actively campaigning for changes that he believes will improve the performance and increase the value of the companies he invests in. Icahn has been involved in some of the biggest corporate battles in recent history, and has become one of the most well-known and influential investors of our time.
Throughout his career, Icahn has built a reputation as a savvy trader and a skilled negotiator. He has been involved in many high-profile investments and has made substantial profits for himself and his investors. Despite his reputation as a ruthless and demanding investor, Icahn is also known for his philanthropy, and has donated millions of dollars to various causes over the years, and has signed on to the Giving Pledge launched by fellow billionaire investor Warren Buffett along with Melinda and Bill Gates. In this piece, we will delve deeper into the life and career of Carl Icahn, and explore what has made him a fixture in the financial markets.
Carl Icahn’s early career
Carl Icahn was born in 1936 in New York City, growing up in Queens. He began his career as a stockbroker in the early 1960s. He quickly made a name for himself as a talented trader and a smart businessman, and he soon started his own investment firm, Icahn & Co. In the 1970s, Icahn started to make a name for himself as an activist investor, and he became known for taking large positions in companies and then demanding changes that he believed would increase their value.
Throughout the 1970s and early 1980s, Icahn continued to make bold investments and take on larger and larger companies. He was not afraid to engage in high-stakes corporate battles, and his reputation as a ruthless and demanding investor continued to grow. Despite his reputation, Icahn was also known for his financial acumen, and he made substantial profits for himself and his investors through his investments. By the late 1980s, Icahn had established himself as one of the most successful and influential investors in the world, and he was poised to continue his reign as a dominant force in the world of finance.
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Carl Icahn – The 1980s and ‘corporate raiding’
The 1980s marked a significant turning point in Carl Icahn’s career. Icahn made a series of highly publicized hostile takeovers and leveraged buyouts, where he would acquire a controlling stake in a company and then force changes that he believed would increase its value. This aggressive approach earned him the title of ‘corporate raider’, something he would be called again and again in the press, and he became one of the most feared and respected investors of his time.
One of the most famous examples of Icahn’s corporate raiding was his hostile takeover of TWA in 1985. He acquired a controlling stake in the airline and then engaged in a bitter battle with management over the future of the company. Despite opposition from the TWA management, Icahn ultimately emerged victorious, and he was able to turn the company around and increase its value. This successful takeover earned him a substantial profit and further solidified his reputation as a savvy and successful investor. At the same time, TWA ultimately went bankrupt several times before eventually selling itself to American Airlines, and Icahn was accused of focusing on his own short-term profits at the expense of TWA’s longer-term health, a complaint that would be echoed throughout Icahn’s career.
Another well-known example of Icahn’s corporate raiding was his attempted hostile takeover of Texaco in 1988. He acquired a large stake in the company and then launched a hostile takeover bid, which led to a prolonged and highly publicized battle with management. Icahn ultimately failed to acquire the company, but the takeover attempt increased Texaco’s stock price and earned Icahn a substantial profit.
He wears the badge of a rough and tumble, brawling investor proudly – his website still refers to the battle with Texaco, with his quote, “A lot of people die fighting tyranny. The least I can do is vote against it,” in reference to his battle with the company.
In any case, these types of high-stakes battles earned Icahn a reputation as a ruthless and demanding investor, and he became one of the most well-known and influential figures in the world of finance.
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Icahn’s biggest activist battles
In the post-1980s era, Carl Icahn continued to make headlines with his activist investing style and high-stakes battles with companies and their management. He continued to take large positions in companies and demand changes that he believed would increase their value, and he established himself as one of the most powerful and influential investors in the world.
One of the most famous examples of Icahn’s activism in recent years was his battle with Bill Ackman over the nutritional supplement company, Herbalife (HLF). Ackman had bet against Herbalife’s stock and claimed that the company was operating as a pyramid scheme. Icahn decided to take the other side of the trade, buying a large position in the company and defending its business model. The battle between Ackman and Icahn became one of the most watched and closely followed corporate battles in recent years, peaking in a widely viewed TV debate between the two. Herbalife’s stock continued to climb after Icahn’s entry, showcasing both the power and influence that Icahn wields in the business world, and his ability to pick a winner.
Another notable example of Icahn’s activism was his involvement in the Dell (DELL) buyout in 2013. Icahn took a large position in the company and then launched a public campaign against the proposed buyout by Michael Dell and Silver Lake Partners. Icahn argued that the proposed buyout undervalued the company, and he demanded that the buyout price be increased. The battle between Icahn and the Dell management became one of the most closely watched corporate battles of the year, and it showcased Icahn’s ability to influence the outcome of major corporate deals – he managed to get Dell to increase his offer, though not by a great amount. In 2018, Icahn returned to the battlefield, opposing Dell’s plan to return to the market. Specifically, Dell planned to buy out tracking shares for its ownership of VMWare (VMW), and Icahn felt Dell would again be shortchanging shareholders. He had more success in this round, getting Dell to increase its offer by over 10%.
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Carl Icahn’s McDonald’s activist pitch
In 2022, Icahn launched an activist campaign and proxy battle against another business giant, McDonald’s (MCD). What made this pitch different was that Icahn had a tiny position in the company – it was reported as 200 shares, and not even included on his 13F filings for the year – and that his activist campaign was against a company that was, as he said, “well-performing, financially speaking.”
Instead, Icahn’s case focused on McDonald’s treatment of the pigs it raised for meat. He argued that their treatment was both inhumane and went against a pledge the company made to reform its practices. While his focus was different, his tools were familiar – Icahn nominated two board members to add to McDonald’s board to help enforce a reform. Ultimately, Icahn’s campaign failed and both his nominees were voted down. He cited several other firms that pledged to make their practices more humane as a positive effect of his campaigning.
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What is Carl Icahn’s current hedge fund and firm?
Carl Icahn currently runs a hedge fund called Icahn Capital Management L.P., which is focused on activist investing. The firm takes large positions in publicly traded companies and then advocates for changes that it believes will increase the value of those companies. Icahn Capital is known for its aggressive and high-stakes activism campaigns, and it has established a reputation for being one of the most powerful and influential hedge funds in the world.
In addition to his hedge fund, Icahn is also the chairman of a holding company called Icahn Enterprises L.P. (IEP), which is a publicly traded investment company. IEP holds a diverse portfolio of assets, including energy, real estate, and automotive companies, and it provides Icahn with a platform to make investments in a wide range of industries. The holding company structure allows Icahn to take positions in companies and then use his expertise and resources to drive value and create returns for shareholders. Overall, Icahn’s hedge fund and holding company provide him with the tools and resources that he needs to pursue his activist campaigns and continue to shape the business world.
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Which companies and stocks are in Carl Icahn’s holdings?
We can see Carl Icahn’s holdings in two places – his Form 13F filings and Icahn Enterprises’ filings themselves. Icahn of course also owns a large position in IEP, as he and his affiliates account for 89% of the company’s outstanding depositary units as of December 31, 2022, worth over $16.3 billion as of this writing.
Major positions include:
CVR Energy (CVI) – Through IEP, Icahn owns 71% of CVR Energy. CVR Energy then has 37% ownership of CVR Partners (UAN). The two related firms are in the oil refining and nitrogen fertilizer business, and have had strong performance over the last year, riding the commodity boom and defying the 2022 bear market.
First Energy (FE) – This Ohio based utility company was a $785M+ position for Icahn as of the end of Q4. The company pays a nearly 4% dividend, common for a utility company, and has managed to have a flat stock performance over the last 12 months, again keeping it ahead of the market.
Occidental Petroleum Warrants (OXY.WS) – Icahn’s portfolio tilts towards energy, and Occidental Petroleum has been a popular position among investing greats. Warren Buffett’s Berkshire Hathaway is also a major holder of the stock. In this case, Icahn holds warrants, which gives him the right to buy Occidental at $22/share, vs. the current share price of $63/share. This is a leveraged bet, as the warrants would be worthless if Occidental was not above the $22/share price. Berkshire Hathaway has a separate set of warrants at $59.62/share. Occidental issued these warrants at the bottom of the oil market in 2020, and they have proven to be a winner for opportunistic buyers.
Southwest Gas Holdings (SWX) – This is Icahn’s most recent and active activist campaign. Icahn charged the board with poor management, and through a proxy fight managed to reach an agreement with Southwest that led to the energy company’s CEO leaving, Icahn nominating several board members, and the company undergoing a strategic review process. Icahn had hoped that would lead to a sale of the company, though so far Southwest has only announced a spin-off of one of its units, Centuri Group. We will see whether Icahn has continued to add to his position when he files his next Form 13F filing in February.
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Carl Icahn Key Stats
- Age: 87 (born February 16, 1936)
- Birthplace: Queens, New York, USA
- Net worth: As of February 1, 2023, Carl Icahn has a net worth estimated to be over $20 billion.
- Residence: New York City, USA
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Find Carl Icahn’s Portfolio
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