Photo: CNBC screengrab
Activist investor Bill Ackman, the founder of $12 billion Pershing Square Capital Management, and billionaire investor Carl Icahn brawled moments ago on CNBC’s “Halftime Report” hosted by Scott Wapner.It was one of the greatest moments in financial television with two hedge fund titans, who have been feuding for a decade, going head-to-head. Watch the full video here >
The segment was originally set up for Ackman to give his response after Icahn blasted him yesterday on Bloomberg TV.
Yesterday, Icahn, who has publicly said before that he doesn’t like Ackman and has “no respect” for him, ripped into his “holier than thou” short on Herbalife in an interview with Trish Regan. Icahn also called Ackman “disingenuous” and said he’s not shorting Herbalife “for the good of humanity.”
Ackman then fired back yesterday evening in a press release saying Icahn is a good investor, but he doesn’t keep his word.
So Ackman joined CNBC today to respond to his long time rival.
Earlier in the CNBC segment, Ackman told Wapner that he finds it interesting that Icahn thinks it’s a bad thing that he gave a short thesis at an Ira Sohn event when Icahn also gave a short thesis in 2002 and 2003 at a Sohn Conference, too.
Ackman’s Pershing Square is shorting more than 20 million shares of Herbalife — a multi-level marketing firm that sells nutrition products. Ackman said at a Sohn Conference event last month that he thinks the company is a pyramid scheme and has a price target of zero.
Minutes into the segment, Icahn called in after the first commercial break to respond to Ackman on live TV. It couldn’t get any better!
He responded after Ackman basically called him a hypocrite.
“Listen. You know, I’ve really sort of had it with this guy Ackman, you know,” Icahn told CNBC.
Icahn then started going over some history of a deal from back in 2003 over Hallwood Realty when Ackman ran Gotham Partners, which was being hit with redemptions and investigated by the SEC at the time over MBIA. (Ackman was never charged with any wrongdoing.)
If you’re not familiar with the story, Ackman called Icahn and asked him to buy shares of Hallwood Realty, a real estate company trading for about $60, but Ackman said was worth $140. Hallwood merged with another company for $137 a share, Icahn wouldn’t give Ackman a cut.
A lawsuit followed and Ackman won and Icahn paid him $9 million Ackman’s investors were owed.
“I’m telling you he’s like a crybaby in the schoolyard. I went to a tough school in Queens you know and they used to beat up the little Jewish boys. He was like one of the little Jewish boys crying that the world is taking advantage of him…” Icahn said when Ackman called him up in 2003, adding “You rue the day I ever met the guy.”
He then started going over how Ackman’s old firm Gotham Partners was being investigated by Eliot Spitzer and the SEC at the time and how he didn’t realise that.
Icahn said this deal they did “cost him money.” Ackman ultimately won in court. What’s more is Ackman was never charged with any wrong doing on that SEC investigation over MBIA.
“He’s the quintessential example of if you want a friend on Wall Street, get a dog,” Icahn later said.
Wapner then let Ackman come into the conversation talking about his MBIA short. MBIA alleged there was a “conspiracy to drive down its stock price.” Ackman, who said MBIA didn’t deserve a triple-A rating, ended up being right when the credit crisis hit.
There were a lot of insults flying during the segment. Ackman said that he wanted to defend his reputation. He also said it’s not a “great use of CNBC air time.”
Then, it went back to Icahn and Wapner asked if he’s long or not.
Icahn said he didn’t come onto CNBC to be “bullied” after asked him that.
“No one’s bullying you, Carl,” Wapner responded.
“Listen to me… I want to say what I want to say and I’m not going to talk about my Herbalife position because you want to bully me…I don’t give a damn about what you want to know. I want to talk about what I want to talk about…You can say what the hell you want. I’m going to talk about what Ackman just said about me, not about Herbalife… I’ll talk about Herbalife when I goddamn want to…I’m never going on a show with you again, that’s for damn sure, OK.” Icahn shot back.
Throughout the segment, Icahn dropped some g-d bombs and “bullshit” and you could hear the floor traders at the NYSE reacting saying “Ooohhh!”
He then proceeded to slam Ackman. “As far as I’m concerned, he wanted to have dinner with me. I couldn’t figure out if he was the most sanctimonious guy I met in my life or just arrogant and that’s Ackman,” Icahn said.
Wapner, who was basically a referee, tried to ask Icahn if he was long Herbalife.
“Let me finish what the hell I want to say,” Icahn snapped at Wapner. “You let Ackman talk.”
“I will tell you one day I think HLF will be the mother of all short squeezes,” Icahn said claiming Ackman used the short to boost his return.
“He talks about charity. That’s complete bullshit!” Icahn said.
Wapner gently reminded him that we’re on live television. “That was an interesting choice of words,” Wapner said. Again, you could hear NYSE floor traders say “Ohhhh!.”
Ackman then jumped in.
“The big issue about Carl Icahn, is he’s not used to someone stepping up to him,” Ackman said, “Especially like me in 2003.”
Wapner asked Icahn again if he’s long Herbalife and what the motives are behind it.
Icahn said “bullshit” again and accused Wapner of “bullying” him. Again, the NYSE traders reacted screaming “Ohhh!”
The conversation turned back to the Herbalife short.
“If there’s ever a short squeeze, what the hell does he do?” Icahn asks. “Ask him!”
Ackman said, “Carl is free to make a tender offer for the company.”
“Hey, hey you don’t have to tell me what I’m free to do,” Icahn shot back.
“What I thank Carl for is he helped highlight issues with Herbalife,” Ackman said accusing him of buying the stock and selling it.
The attacks continued, though.
“I appreciate you calling me a great investor, but unfortunately I cannot say the same,” Icahn said.
“Bill, I appreciate you coming on. Carl, I hope you will come back,” Wapner said.
Before Icahn called in…
Ackman says that Herbalife has done harm to millions of people and it deserves scrutiny.
He says the press wrote some “fun pieces” on Bill Ackman v. Dan Loeb or Bill Ackman v. Carl Icahn. He says the goal is to shed the truth about the company and get the press dig into it.
He’s talking about short selling in the market. He notes that it’s unfortunate that they’ve lost some money so far.
He says shorts play an important role in the market.
CNBC’s Scott Wapner asked if Ackman is friends with Daniel Loeb of Third Point.
Loeb took an 8.24% stake (8.9 million shares) on the long side after Ackman’s short calling Ackman’s accusations “preposterous.”
Ackman said they’ve both been in the business a long time.
“If he [Dan Loeb] stays long Herbalife, he will lose his entire investment,” he said later in the interview.
Loeb is also reportedly short Nu Skin. Ackman says he doesn’t understand why he would be short Nu Skin when he’s long Herbalife.
Ackman says that he doesn’t need to be “loved by everyone.”
He’s also calling about Bob Chapman of Chapman Capital who he said came out and said he had a large position. Ackman says that Chapman Capital has less than a $100 million AUM.
On His JCPenney Stake…
Ackman, who is the largest shareholder of JCPenney, is talking about that investment. He has taken a bath on the stock so far.
He’s says CEO Ron Johnson has done some “incredible things,” though.
He said if Johnson can’t turn it around in three years, then he’s not the right guy.
He does, however, expect the retailer to make progress.
“Ron is going to work to solve the problems,” he said. “I have enormous confidence in him…He’s brilliant.”