Section 16(b)

Have you had enough Icahn and Ackman and Herbalife yet? Probably, right? Still, I should mention two more things, mostly because I kind of got them wrong this morning.

The first thing is that I thought Icahn is long via options, rather than shares, for financing reasons. He sometimes uses this method to avoid HSR antitrust filing requirements, but here he actually did the filing and waited the thirty days to buy more shares. But in fact there are a number of thresholds that require pre-acquisition filing; Icahn seems to have waited to cross the $70-ish million threshold in physical shares, but he’s now re-filed to get permission to take physical possession of the full ~$500-ish million that he currently owns synthetically. (And more, potentially.) Icahn said on CNBC this afternoon that he’s planning to convert into physical shares as soon as he gets that approval.1 If true, that suggests relatively little focus on leverage and cheap financing, and relatively significant focus on short squeezing and fucking with stock borrow. So that’s exciting for everyone.

Second: I said this morning that one option that might be appealing for Icahn would be to take profits on his position by dumping some of the stock after this morning’s run-up.2 Nope! Not appealing! Terrible idea! Don’t do it Carl!3 Read more »