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It may have started as a spiteful lark, one that proved spectacularly profitable but still based on one committed loather’s loathing of another, another who he believed had once wronged him, and whose quixotic if ultimately more-or-less correct (if somewhat overenthusiastic) analysis created an opportunity for vicious vengeance. Yes, the partnership between Carl Icahn and gassy diet shake purveyor Herbalife may have, initially, been nothing but the financially living embodiment of the axiom that the enemy of one’s enemy (in this case, crybaby Bill Ackman, before he found love and god in the form of an old man who he no longer has use for) is one’s friend.

But from there, it blossomed: The chance marriage of convenience turned into one of genuine love, thanks to the happy accident that it made both sides incomparably richer, and in Icahn’s grandfatherly eyes—much more sympathetic, it must be said, than his paternal ones—appeared a genuine twinkle of affection, even adoration, for this pyramidical son. A genuine belief that the little scamp was perfect—a strange conviction to have about a stock that was essentially flat in a year that saw the markets set dozens of records, which is not something that one might expect of a perfect company, even in a weird year, to say nothing of a company whose business practices regulators keep calling illegal or illegitimate.

Mr. Icahn took it up on the offer partly because he sees no need for additional activism at the company.

Love, indeed, is a mysterious thing. When, indeed, did Icahn ever see the need for any activism at the company? His whole involvement therewith was predicated on the belief that it needed no activism at all. Oh, and that offer? Why, to get Mr. Icahn out of the stock, as it were, or at least most of it.

Mr. Icahn sold about $600 million of his 16% Herbalife stake back to the company in recent days…. That leaves him with a roughly 6% stake, worth $400 million. Given that his holdings will go below the level stipulated in an agreement Mr. Icahn has with the company, he also plans to give up the five board seats currently held by his representatives, the company said.

We’d suggest that now may be a good time for Ackman to have a second go at the company, but he doesn’t do things like that anymore.

Carl Icahn Sells More Than Half of His Herbalife Stake [WSJ]



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