Carl Icahn's Long String Of Failures

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On Friday, Carl Icahn announced that he was stepping down from the Yahoo (YHOO) board 1.5-years after he first invested in the company in hopes of selling to Microsoft or somehow shaking it up. While he successfully won representation on its board, the whole thing was a big waste of time and money for the famous corporate raider. The stock was around $20 when he came, and under $17 after hours Friday.

Funny enough, during Icahn’s battle to get on the company’s board, Yahoo warned us about Carl’s track record with public companies, saying he frequently got into money-losing situations.

See the full list of his flops >>

They were right!

Investors should be forewarned: Icahn is often successful at getting onto boards of companies, but that’s where it ends. Icahn does not have the midas touch, and you shouldn’t invest in anything just because Icahn does.

Check out his other failures with public companies >>

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[slide
permalink=”blockbuster-1″
title=”Blockbuster”
content=”Carl Icahn’s affair with Blockbuster actually started in 2005, when Icahn successfully waged an attempt to get representation on the company’s board.

But his timing couldn’t have been any worse, and it’s been all downhill since that initial ‘success.’ BusinessWeek notes he spent at least $320 million on the investment, most of which has been flushed down the toilet.”
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[slide
permalink=”time-warner-2″
title=”Time Warner”
content=”In 2006, controlling 3% of the company, Carl Icahn waged a quixotic campaign to get Time Warner (TWX) to split into 4 separate units.

But he didn’t get anywhere close. Instead, he only convinced management to increase share repurchases, and even that was a horrible move. Shares were trading at about 45 when that was announced. Today they’re around 30.”
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[slide
permalink=”telik-3″
title=”Telik”
content=”In early 2007, Carl Icahn owned at least 5 million shares in biotech Telik.

Shares were acquired between $17 and $7. By early 2009, he was out of Telik, with the stock trading sub-$1.”
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[slide
permalink=”motorola-4″
title=”Motorola”
content=”On January 30, 2007, Carl Icahn confirmed that he owned 33.5 million shares of Motorola (MOT).

The stock then was around $19. Today the stock is just above $8.”
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[slide
permalink=”motricity-5″
title=”Motricity”
content=”This isn’t a public company, but it was another big mobile flop.

Carl Icahn plunked down $50 million in Motricity in early 2007. Then later that year he invested another $50 million, throwing more good money after bad, bringing his total investment in the mobile software company to $100 million. He also put his son Brett Icahn on the board. But the company’s done little, and after acquiring InfoSpace, it basically canned all of its own employees, reducing its size from about 350 to 100.”
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[slide
permalink=”lear-6″
title=”Lear”
content=”Before the auto industry completely imploded, Carl Icahn took a significant stake in parts supplier Lear, before ultimately trying to take the company private entirely.

But shareholders rejected that offer in June 2007, and by November he dumped 2/3rds of his stake at a significant loss.”
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[slide
permalink=”guaranty-financial-7″
title=”Guaranty Financial”
content=”In January 2008, Carl Icahn owned nearly 10% of the Texas-based lender.

Then the stock was trading over $12. Icahn actually pushed its former parent, Temle-Inland, to spin off the financial institution. Guaranty finally declared bankruptcy late this summer.”
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[slide
permalink=”greenbrier-8″
title=”Greenbrier”
content=”In early 2008, Carl Icahn grabbed a nearly 10% stake in railcar maker Greenbrier.

The stock was over $20, and he had visions of merging it with American Railcar another one of his holdings. That flopped, and today Greenbrier is below $10.”
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[slide
permalink=”wci-9″
title=”WCI”
content=”Another disaster, this time in the homebuilding sector, with a company where he actually served as chairman.

Bloomberg: Icahn paid an average $18.46 a share, or about $112.6 million, for his stake in WCI, which is worth about $4 million at today’s share price of 66 cents, bringing his loss to $108.5 million. WCI’s shares traded at a high of $35.63 on Feb. 25, 2005.”
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[slide
permalink=”winners-10″
title=”Winners”
content=”To be fair, Icahn has had a few victories in the last few years.

Enterprise software maker BEA made Icahn nearly 50%, after he pushed for and orchestrated the company’s sale to Oracle. He also did well in ImClone’s sale to Eli Lilly, and with Kerr-McGee’s sale to Anadarko.”
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[/slideshow]

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