Bloomberg: Do you think he’s made a mistake on this one? Icahn: Well, if you look at his record lately, he has made a few very big mistakes. I am not going to say just this one. I am not here to question Ackman. I do not want to get pulled into that again…I look at it as a great opportunity. Ironically, I thank him for giving it to me. Does not mean I like him…I do not respect him. I do not like him. [BloombergTV, earlier]
Bill Ackman Is Still Thinking About Filing An Appeal Against The SAT Board For Those 4 Questions He Got “Wrong” In 1984By Bess Levin
In 1984, when he was a junior at Horace Greeley High School, in affluent Chappaqua, New York, he wagered his father $2,000 that he would score a perfect 800 on the verbal section of the S.A.T. The gamble was everything Ackman had saved up from his Bar Mitzvah gift money and his allowance for doing household chores. “I was a little bit of a cocky kid,” he admits, with uncharacteristic understatement. Tall, athletic, handsome with cerulean eyes, he was the kind of hyper-ambitious kid other kids loved to hate and just the type to make a big wager with no margin for error. But on the night before the S.A.T., his father took pity on him and canceled the bet. “I would’ve lost it,” Ackman concedes. He got a 780 on the verbal and a 750 on the math. “One wrong on the verbal, three wrong on the math,” he muses. “I’m still convinced some of the questions were wrong.” [Vanity Fair]
Earlier today it was noted that, to the surprise of many, Bill Ackman and Carl Icahn had refrained from asking questions or dialing in and making sudden outbursts during this morning’s conference call to discuss Herbalife’s fourth quarter earnings. Obviously this came as a shock on account of Ackman and Icahn taking many opportunities in the past to share their feelings re: the company and each other. And while it’s true both men personally held their tongue’s today, according to Pershing Square, one of its analysts had planned to ask questions on Bill’s and the hedge fund’s behalf but was shot down. Read more »
Carl Icahn Won’t Say That He Bought Herbalife Just To Spite Ackman But If You’re Going to Write That, Let’s Just Say He Isn’t Going to Call You Asking For a CorrectionBy Bess Levin
“Look, I’m in this to make money. That’s what I do. The fact that it might hurt Ackman, I’m not going to run and cry and do penance. You might like to say that it’s the strawberry on top for me, that’s up to you.” [Barron's, related, earlier]
Yesterday Carl Icahn filed a 13D disclosing a ~13% synthetic stake in Herbalife. There are three possible reasons that Carl Icahn might want to own half a billion dollars worth of Herbalife stock:
- as a value investment in a company with strong cash flows and a beaten-up stock price,
- as a toehold in preparation for launching a tender offer to take the company private, or
- to fuck with Bill Ackman.
If you watched Icahn and Ackman square off on CNBC, or read the transcript, or witnessed some sort of dramatic recreation of it, I think you’ll join me in assuming it’s sheer fuck-with-ery. “Cry, Jewish boy, cry!,” he probably said as he signed the 13D. But who knows? He’s up $80+ million as of this morning, so two birds with one stone.
A curiosity of this position is that it’s mostly synthetic: Icahn owns about 2.5 million actual shares and about 11.5 million call options. Like so:
As we’ve discussed before, this is Icahn’s standard M.O., and it’s not because his dealers are dummies who will sell him levered upside on a stock that he can move with just a lift of his magnificent eyebrows. Read more »
If you have an opinion on whether Carl Icahn or Bill Ackman got the better of today’s amazing CNBC shoutfest over Herbalife, you have a number of options for expressing it. We’ve had like four posts so, y’know, comment away, but if you want something more formal both CNBC and Business Insider have polls you can vote on. Also if you listen to CNBC’s video you can hear in the background a bunch of men who, when not oohing and ahhing over cursing on television, spend their days running around pretending to trade stocks. Don’t be fooled, though: you can actually trade stocks, even Herbalife’s. If Icahn-Ackmania changed your view of Ackman’s short thesis on Herbalife, feel free to express that changed view with money.
As of 4pm-ish, BI and CNBC both give Ackman the win. Mr. Market goes the other way, though without overwhelming enthusiasm.1
This makes sense – as a former high school debate judge I’d score this one for Ackman too. On style alone: Icahn apparently did his interview in a zen garden surrounded by a team of silent and efficient researchers; Icahn prepped by going to a Queens schoolyard and getting in fights.
But on substance, too. Icahn’s main claim, that shorting a company and then saying mean things about it is “manipulation” or otherwise bad form, is sort of crazy; Ackman’s zen researchers helped him point out that Icahn did just that at Ira Sohn in 2003. More important, though: how does Icahn’s “you can be short, but you can’t tell anyone” thesis – as he says, “If you’re short, you go short and hey, if it goes down you make money” – hold up when applied to long investing? Read more »