When Mark Hughs founded a multi-level marketing company called Herbalife in 1980, he probably thought it had the power to do a lot of things. Help people lose weight. Makes others rich. Shake up the diet industry. What he mostly likely did not expect, however, was that his li'l company that could would reignite a feud between two billionaires that would devolve into a flurry of press releases quibbling over who was dying to be friends with whom, shouting matches on live TV, and, we predict, someone telling someone else he has a right mind to "Rip the eyes out of your head and piss into your dead skull! You messed with the wrong hedge fund manager!"
Obviously, we're talking about Bill Ackman and Carl Icahn, who've never had good things to say about one another but recently cranked their unbridled hatred for the other several notches. For those just tuning in, yesterday afternoon, Icahn took to Bloomberg TV to remind the world that he doesn't like Bill Ackman, he doesn't trust Bill Ackman, and he doesn't respect Bill Ackman. Icahn went onto say that he didn't think Ackman shorted Herbalife in the "right" way and suggested-- by saying outright-- that the notion Ackman is donating his winnings to charity is bull shit because his LPs will still get paid.
None of this sat well with the Pershing Square founder, who last night issued a press release detailing the business deal that he and Icahn collaborated on a decade ago-- the original source of their bad blood-- which revealed Icahn to be a guy you can't trust and with whom you would not want to share a beer, which is why Ackman refused Carl's request to be friends.
Now it was old Carl's turn to be get angry about the way his nemesis chose to characterize him, and he wasted no time putting together a counterpunch. As for why his statement came out nearly 12 hours after Bill's, we assume that it took a while to get typed up, because he was dictating it to someone (oh to be a fly on that wall) and also because he really want to nail the last line.
In 2003 I helped Bill Ackman out of a jam he was in with a fund called Gotham Partners, by buying Gotham’s stake in a company called Hallwood Partners.
In our stock purchase agreement with Gotham they were entitled to an earnout equal to 50% of our profit on the Hallwood shares if we “sold or otherwise transferred” those shares. This was to protect Bill from looking bad to his investors if we went out and flipped the stock to someone else.
We never sold or transferred the Hallwood shares. Instead Hallwood was acquired in a merger transaction that we voted against.
We did not believe that the agreement covered such a situation, based on cases in a number of states, and it was very clear from my negotiations with Bill that that he was not to be paid under these circumstances. However Bill sued and was able to convince New York courts not to follow the law in other states.
But I know, and I am positive that Bill also knows, that it was never our deal that we should pay Gotham in a situation like this. And if my written agreement was as clear as my negotiations with Bill Ackman we would not have had to pay him.
To get the record straight, I never asked Ackman to be my friend. Quite to the contrary, Ackman has stated to me on more than one occasion that it’s a shame we are not friends because then he could have invested with me. But, even if we were friends, I would never have invested with him because I believe he takes inordinate risks. HLF I believe proves this point. As it has been pointed out HLF can turn out to be “the mother of all short squeezes”.
Selling short 20% of the shares of a company such as HLF with limited partners’ money that can be withdrawn, in my opinion, leaves much to be questioned.
Bill Ackman has recently stated “Carl Icahn is a great investor.” I thank him but unfortunately I cannot return the compliment.
Now, the thing about issuing press releases in which you trash a fellow billionaire and go back and forth claiming he was the one who was desperate to be friends with you and that you were the one who turned him down is that they serve a nice purpose in terms of coming off as the type of person who is so delightfully self-important that you issue press releases in which you trash a fellow billionaire and go back and forth claiming he was the one who was desperate to be friends with you and that you were the one who turned him down. But they take time to write and circulate and you don't get an instantaneous response. For instance, writing in a press release that your adversary has been acting like "a crybaby in the school yard" is not the same as saying it to him as part of a live-broadcast that you've both called into.
That's where CNBC comes in. While the network generally airs the kind of content that is best watched on mute or not at all, it really came through today. The above clip should be viewed in full, several times, but we've printed the best parts here. You'll notice that they're heavy on Icahn, light on Bill, which is probably a good thing if one is interested in coming off as a reasonable, sane person, though sadly does not help when it comes to getting play on our highlights reel.
"I was minding my own business in 2003 and I get a call from this Ackman guy and he's like the crybaby in the school yard. I went to a tough school in Queens and they used to beat up the little Jewish boys and he was like these little Jewish boys crying saying the world was taking advantage of him. He was almost sobbing. And he's in my office talking about this Hallwood deal and how I can help him. It's like in the old song, I rue the day I ever met the guy." Icahn
"He's the quintessential example of if you want a friend, get a dog." Icahn
"Carl thought this guy is road kill on the hedge fund highway, I'm never going to have to worry about this kid again." Ackman
"I told Carl I'd go to the end of the earth to pay my investors and that's what I did." Ackman
"I don't give a damn about what you want to know. I'm going to talk about what I want to talk about. If you want to take that position I'll never go on CNBC. So you can say what the hell you want...I'll talk about Herbalife when I god damn want to, not when you want me to. I'll never go on a show with you again, that's for damn sure." (Icahn to host; this is arguably the point at which Icahn loses his mind and also the most amazing 10 seconds to ever transpire on CNBC.)
"When it comes to friends, he called me!!!" Icahn
"Let me say what the hell I want to say." Icahn
"Ohhhhhhhh." Throughout, from floor traders like they're in the Jerry Springer audience on paternity results day.
"I wouldn't invest with you if you were the last man on earth." Icahn
"If you want to take...hello?"Icahn
"Yeah, we're listening." Host
"Well, if you're listening, let me talk!" Icahn
"He talks about charity? That's complete bull shit." Icahn
"Let me remind you Carl that we're on live TV." Host
"Bull shit-- Max Meyers said I can say whatever I want on the show." Icahn
Where can this possibly go from here? We'd be happy to broker some sort of peace talks but it doesn't seem like anyone is ready for that yet (and based on today's performance, it seems like Carl has at least one more press release or YouTube address in him, in which he announces, "I'm inviting Bill Ackman to a one-on-one meeting with my lap, where my hand will get to know his behind").
In the meantime, if there is any interest in mugs, hats, tee-shirts, and mouse pads with "I'll talk about Herbalife when I god damn want to" printed on them, do let us know.
Ackman, Icahn Hurl Accusations, Insults [CNBC]
Icahn: Au, Contraire I Never Wanted To Be Ackman’s Friend [Deal Journal]
Related: Bill Ackman Thinks Carl Icahn Is A Great Investor, Bald-Faced Liar, Person Who Will Never Gain Admittance To The Friends Of Bill Ackman Society; Carl Icahn Still Thinks Bill Ackman Is A Bum, But That’s Just, Like, His Opinion