If you've been wondering what Carl Icahn is up to these days – after so many months of uncharacteristic calm – head on over to CarlIcahn.com and check out the hedge funder's latest literary accomplishment. It is a doozie.
Recently Icahn has assembled a stake in natural gas driller SandRidge Energy in order to fight a proposed acquisition, which Icahn argues is “value-destroying” and “ludicrous” and designed to personally enrich CEO James Bennett. In response, SandRidge implemented an aggressive poison pill that disallows any shareholder from acquiring a position greater than 10 percent. Naturally, the move ruffled Icahn's feathers. As one can see from his latest letter to the company, the relationship is far from amiable:
You adopted a poison pill that is a complete travesty and represents a new low in corporate governance. Such actions would make a totalitarian dictator blush, yet you take them with a straight face and misrepresent the intentions of the pill by describing it as a “shareholder rights plan.” We are not aware of a more insulting euphemism.
Worry not, Icahnophiles. Uncle Carl is back and badder than ever, and all he had to do was get back to his greatest, and possibly only, purpose in life: trolling public companies.
First, that meant ditching D.C.
Initially, Uncle Carl's ill-fated foray into national politics this past year was a perfectly Icahnian move. What better gambit for the grandaddy of activist investors than accept a role as Secretary of Do-Whatever-The-Fuck-You-Want, indulge in nakedly self-interested gab sessions with the dealmaker-in-chief, and design an entire investment thesis around the idea that the federal government will bend to the will of an octogenarian hedge funder simply because he made some dough on a casino deal with the president 25 years ago.
But we should have seen from the start that Icahn's would be a failed raid on Washington. For the politically novice and easily distracted Trump administration, reclassifying the treatment of renewable fuel credits was not high on the list of MAGA agenda items, no matter how many leathery sirloins Icahn choked down at Chateau Trump. There's also that little hangup known as “federal law”. But the root of the issue was Icahn himself: As others have learned, political activism and shareholder activism are very different ballgames.
So we're glad to report that Icahn seems to be feeling his oats again. Here he was in a CNBC interview Thursday discussing the SandRidge contretemps:
The pill is the most outrageous thing I’ve ever seen. I’m not even arguing about Bennett taking out all this money for himself and, I believe, screwing the shareholders. Here’s the unbelievable thing: They’re saying you, the shareholder, don’t have a right to go against us.
Even in a totalitarian state, you have a right to talk against the dictator. Of course, you might get shot. But you can try!
This is vintage Carl. Elsewhere he called SandRidge’s board “terrible,” said the company “makes a banana republic look good” and described Bennett’s ambitions in somewhat unsubtle terms: “I hate to use the word steal, but that’s the closest I can think about it.”
Clearly, Icahn is back in his element. And he knows it. “I’ve been pretty good at this in the past, and this is what I do,” he said when asked about his chance of succeeding against SandRidge. ”I’m going to give it my best college try.”
It's not so much the potential for making some money that attracted Icahn to SandRidge – though there is that – but the principle of the thing. If American democracy means one thing, Icahn explained, it's that “you can go and change the companies if they’re badly run.” And unless someone like Uncle Carl stands up to SandRidge now, who knows what sorry state American business might find itself in:
Normally, this would be a little small for me. It wasn’t something like, oh I wanna go get SandRidge, which is badly run… The concept of this is so bad and reprehensible that it has to be stopped. Corporate governance ... is not going to stay great forever.
So what's next for Icahn? This fight should prove entertaining. And now that he's back to terrorizing public companies, he might finally get back to what might be his truest calling: terrorizing Bill Ackman.