Carl Icahn is a 79-year-old billionaire investor from New York known for his activist investment strategy and "Icahn Lift". He founded Icahn & Co. in 1968 and currently has a net worth over $20 billion. Icahn pursues contrarian, activist investments by purchasing stock or debt in companies and then pushing for changes to unlock hidden value. Some of his recent and ongoing investments include CVR Energy, Tropicana Entertainment, and an opposing position in Herbalife against Bill Ackman.
2. Carl Icahn
Known for the “Icahn Lift”
79 years old, $20B+ net worth
Raised in NYC
Princeton (BA in Philosophy)
NY University School of Medicine (dropped out)
Started as a stockbroker on Wall Street in 1961
Founded Icahn & Co in 1968
Icahn Enterprises (IEP)
9. Timeline of Recent Investments
‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15
Oil and gas assets
Gain of $0.6b
Acquired Icahn Capital
Management
Acquired 100%
PCS Metals
America Casino &
Entertainment:
$0.7b gain casino sale
Majority interest
in Federal Mogul
54.4% of ARI
contributed by Carl
Icahn
71.4% of Viskase
contributed by
Carl Icahn
Majority stake
in Tropicana
Entertainment
Majority interest
in CVR Energy
CVR Refining (IPO and
secondary offering)
CVR Partners (secondary
offering)
Majority interest
(75%) in ARL
‘16
IEP Auto acquired all
assets of Uni-Select Inc.
in the U.S.
Controlling
interest in
Ferrous Resource
Total Assets
$4.2b
Total Assets
$37.3b
10. Example 1: Failure in Blockbuster
‘04 ‘05 ‘06
Icahn bought
9.8m shares
‘07 ‘08 ‘09 ‘10
Blockbuster makes
bid to buy Hollywood
Entertainment
Doubled his
stake
Won a Board seat
Drove CEO Antioco
out of company
Sold majority of
stake,
at loss of 97%
‘11
Blockbuster
filed for
bankruptcy
“Worst investment I ever made.”
11. Example 2: PayPal Spinoff
$ b
2006 2007 2008 2009 2010 2011 2012 2013
eBay’s Revenue by Business Segment
Marketplaces Payments
12. Example 2: PayPal Spinoff
‘14 ‘15
eBay announces
PayPal spinoff
Share price
↑7.5% or $56.63
Icahn (2% of eBay)
proposes to spin-off
PayPal
Settles proxy fight,
re: PayPal spinoff
Spinoff completed
eBay acquired PayPal in 2002, after its IPO
‘16
Icahn now owns 4%
of each company;
Revenue Growth
eBay 10%
PayPal 19%
13. Example 3: Herbalife
‘12 ‘13
SEC filing reveals
Icahn’s 13% in
HLF
HLF falls 41% as Bill
Ackman announces his
$1b short
Increased stake to
16.5%, $250mm
FTC opened probe to
investigate HFL
His opposing position against Bill Ackman
‘14
Bill Ackman explains
his short;
HFL ↑25%
‘15
15. Time Period IEP Berkshire Leucadia Loews S&P 500 Dow
Jones
Russell
2000
3y ended Jun
30, 2015
154% 64% 22% -4% 61% 47% 64%
5y ended Jun
30, 2015
190% 71% 35% 19% 122% 105% 120%
7y ended Jun
30, 2015
61% 70% -44% -14% 88% 88% 100%
Apr 1, 2009 -
Jun 30, 2015
327% 136% 77% 81% 195% 173% 222%
Jan 1, 2000 -
Jun 30, 2015
1426% 265% 261% 334% 9% 122% 204%
Apr 1, 2009 -
Jun 30, 2015
26.1% 14.7% 9.6% 10.0% 18.9% 17.4% 20.6%
Jan 1, 2000 -
Jun 30, 2015
19.2% 8.7% 8.6% 9.9% 4.2% 5.3% 7.4%
Gross Return
on
Investment
in Stock
Annualized
Return
Overall Performance Record
16. Taking a
Step Back
Are there
economic conditions
where the the strategy
works better?
Low interest rates
Acquisitions therefore are less costly.
Abundance of cash rich
companies
Icahn believes that many companies are holding
cash because they do not have positive NPV proj-
ects to invest in.
Prevalence of mediocre
top management
and non-caring boards.