The Fabulous Life Of Carl Icahn — Investing King And Bill Ackman's Nemesis

gail golden carl icahn

Unless you’ve been living under a rock, you know that the loudest voice to enter into the drama between Bill Ackman and his short, Herbalife is legendary investor Carl Icahn.Icahn has been working Wall Street since the 1960s, but it wasn’t until the 1980s that he gained his reputation as a ruthless activist investor, taking a controlling interest in companies like TimeWarner, TWA, and Blockbuster.

Now he’s a billionaire. And he hates Bill Ackman.

Their feud came to a head this week, when he and Ackman took 20 minutes out of their Friday afternoon to discuss their disagreement publicly on CNBC.

So who is the man taking the other side of what is arguably the short of the year?

Like most truly successful Americans, Icahn came from humble origins.

Icahn was born in 1936. His father was a synagogue cantor (though apparently an atheist); his mother a school teacher. He attended Far Rockaway High School in Queens.

Source: Icahn report

He worked his way into Princeton, where he majored in Philosophy.

He graduated in 1957.

Source: Icahn report

After brief stints at med school and the army, Icahn joined legendary mutual fund manager Dreyfus & Co.

Dreyfus merged with Mellon in 1994.

Source: Icahn report

By 1968, Icahn was able to buy a seat on the NYSE and start Icahn & Co. Inc., a brokerage firm.

He was 32.

Source: Icahn report

The big break came in 1978, when a bet on Tappan, a stove maker, grossed $3 million for the firm.

That's nearly $9,000,000 in 2005 dollars.

Source: New York Times

He'd take a controlling stake in a firm and force extreme changes in the company's structure (like spinning off different units). He forced some firms to pay him 'greenmail' money to keep him away.

Source: Investopedia

His highpoint in the '80s was his takeover of TWA.

Having purchased the company in 1985, he took it private three years later in a $650 million share-buyback plan.

Source: Investopedia

However, the move also saddled the airline with hundreds of millions in debt.

In 1992 it declared bankruptcy, and Icahn left the firm.

Source: Investopedia

But his ubiquity enabled him to quickly bounce back.

He spent most of the 90s seeking to break up RJR Nabisco. The gambit ultimately failed but Icahn realised $100 million in profits from his involvement in the firm.

Source: New York Times

In the late '90s, Icahn suffered a rare defeat after failing to takeover Marvel Entertainment.

The fun part about Icahn is that at any given moment, he's plotting some crazy scheme.

Google 'Icahn' and any year, and you get something juicy.

  • 2000: 'Icahn wins control of Atlantic City casino' (Icahn sold the property in 2006 for $250 million; he'd paid just $65 million)
  • 2002: 'Icahn's ImClone interest' (bought by Eli Lilly in 2008)
  • 2004: 'Icahn targets Mylan' (Icahn forces the drug maker to drop a major acquisition effort)

Icahn rechartered his holdings to Icahn Enterprises in 2007.

The company consists of:

  • Federal Mogul (automotive)
  • Tropicana (entertainment/casinos)
  • ARI (rail car)
  • Viskase (food packaging)
  • PSC Metals (recycling)
  • Bayswater (real estate)
  • WPI (interior decorating)

Source: Icahn Enterprises

After six decades on Wall Street, the number of firms in which Icahn has owned a stake or served on the board is staggering.

Besides those already mentioned, these firms include...

Texaco

Source: Icahn Report

Phillips Petroleum (now Conoco Phillips)

Source:

Western Union

Source: Icahn Report

Viacom

Source: Icahn Report

TimeWarner

Source: Icahn Report

Blockbuster

Source: Icahn Report

It should be no surpise that a man of his stature has made some enemies. In his case, it's hedge fund superstar Bill Ackman

The feud between Ackman and Icahn only ended in 2011 and dates back to 2004. One of the weirdest things about it? It was all over only $4.5 million.

In 2003 Bill Ackman's first hedge fund, Gotham Partners, had just blown up and he was being investigated by then-Attorney General Eliot Spitzer. The investigation was eventually dropped, but this definitely wasn't the best time in Ackman's career.

He needed to do a deal. Specifically, he wanted to sell Hallwood Realty, a company whose stock was trading about $60 a share but Ackman believed it was worth $140. So he called Icahn.

Source: NYT

They did a deal in 2003 that ended in Ackman suing Icahn by 2004 and winning in 2011.

To make sure everything was on the up and up, Ackman included some legal provisions in his contract with Icahn. First the contract stipulated that if there was any legal trouble, the loser would pay the winner's legal fees. Second it said that if payment was delayed, Icahn would owe Ackman a lot of interest.

In 2004, Hallwood merged with another company, for $137 a share. That meant Icahn made some good money on the deal, so Ackman called him for Gotham Partners' cut.

Icahn said he wouldn't pay, but a Court decided against him in 2011 and he ended up paying Ackman $9 million. Source: NYT

There was a lot of ugly name-calling involved and to this day the two do not like each other.

Not to say that Icahn isn't charitable himself — he's left quite a mark on NYC.

Carl Icahn Stadium on Randall's Island is one of those stamps. Here's what they do:

Randall's Island Sports Foundation, Inc. (RISF) is a nonprofit organisation that, in conjunction with City leadership, works to realise the island's unique potential by developing sports and recreational facilities, restoring its vast natural environment, reclaiming and maintaining parkland, and sponsoring programs for the children of New York City.

And if you're heading that way from Manhattan, you'll notice Carl Icahn's name on a stretch of the city's main east side highway, the Franklin Delano Roosevelt Drive.

Source: Icahn Stadium

He also founded his own charter schools in the Bronx.

That philanthropy — and a legendary wit — explain why ultimately, people usually end up falling for the kid from Queens. Check out his stand up below.

Oh by the way.

He's now worth $14.8 billion.

Source: Forbes

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.