Now deep into his golden years, it seems Carl Icahn has decided that there are more important things than making money. Just days away from starting his dream job of managing the largest regulatory bonfire in history on the National Mall, for the past four years he seems to have derived most of his pleasure from torturing friend-turned-enemy-turned-friend-turned-maybe-enemy-again Bill Ackman. Which is good, because for the last three of those four years, Icahn hasn’t been very good at making money. In fact, during that time, he’s actually been worse at it than Ackman, including a 20.3% drop in 2016 compared to Pershing Square’s 13.5% dip.
Uncle Carl doesn’t seem to care. Instead, infuriated by late-summer rumors that he was about to sell out HLF to Ackman, Icahn called off their truce and spent the ensuing months dumping another quarter-billion dollars into the stock, boosting his stake in the company to 23.1%. Shoving another 4.5 million shares in Ackman’s face may have been cathartic, if flatulence-inducing, but it also coincided with a roughly 20% drawdown.
That, combined with the relatively meh performances put in by the other big positions in his book (Cheniere Energy, PayPal, etc.; we won’t know for another month or so) and his costly pre-election loss of faith in the inevitability of President Trump’s victory have Icahn starting off his ninth decade very much on the wrong foot, investment-wise.
The weak 2016 performance reflected Icahn’s bearish stance as the fund had a sizable short position in the U.S. equity market that hurt results as the S&P 500 index gained almost 10% last year. The Icahn fund had a net short position of 138% at the end of the third quarter—fourth quarter positioning has not yet been disclosed….
The fund appears to have been down about 8% in the fourth quarter. It was off 12.7% through the first three quarters of 2016, according to a regulatory filing.
And it could have been even worse: Before President Trump fixed the U.S. economy on Nov. 8, Cheniere was down about 17% on the quarter. After American became Great Again, it rallied to cut that drop to just 5%.