The Icahn Lift

60 Minutes' Lesley Stahl Profiles The Billionaire Investor

(CBS)  This segment was originally broadcast on March 9, 2008. It was updated on Aug. 8, 2008.

It takes a certain breed of stock market investor, the kind with lots of money and lots of guts, to thrive in queasy times like these, when the market keeps losing altitude. Carl Icahn is one of that breed.

He has a knack for turning someone else’s loss into profit for himself. But he can also help others improve their bottom line through the so-called "Icahn Lift," an upward bounce that often happens when he starts buying a beleaguered stock.

When we first broadcast our story on Icahn in March 2007, the subprime mortgage crisis and recession fears were just beginning to take a toll on the markets. With the Dow Jones down by more than 10 percent this year, most investors are tearing their hair out. But not Icahn. As correspondent Lesley Stahl found out he has a habit of pouncing when everyone else is losing their shirts.

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The day Stahl visited Icahn Enterprises the stock market was swinging wildly, at one point dropping 300 points.

Icahn, who works in a skyscraper suite overlooking New York's Central Park, called it a "tough day."

"I think I lost today," he told Stahl.

Actually, he lost big: well over $150 million that one afternoon. But when Stahl spoke with him a few days later, Icahn told her, "No big deal!"

He lives by the mogul's credo: never let 'em see you sweat. "I was buying that day," he said. "I mean, seriously, I was very happy about that."

"You looked like you were…frazzled and…," Stahl pointed out.

"Well, I'm always frazzled. I mean, look at now, I combed my hair. But I'm always got so much going on. And I enjoy that," he said.

One of his biggest holdings, Motorola, plunged 19 percent that day. But Icahn, the ultimate risk taker, was gobbling up more shares in the company.

Motorola is a perfect example of how Icahn operates. First he chooses a company he thinks is poorly run and trading below value. Two years ago he started buying up millions of shares of Motorola; now he controls over a billion dollars worth of stock.

As he usually does, he's been making demands in order to jolt up the sagging stock price. His first demand was to dump the CEO; that happened in December. Then, he demanded a break up the company.

His goal is always the same: to reap a hefty a profit for himself.

He's been successful, say Wall Streeters, because he's intimidating and relentless.

"With me I think generally they take the attitude: 'Try to make peace, try to work with him, because he’s not going away,'" Icahn explained.

"Is it 'cause you have so much money?" Stahl asked.

"Well, and they know my nature," he replied.

Asked what his nature is, Icahn told Stahl, "That I'm not going away. That I'm an obsessive guy. That I'm comin' here, I've done it, and there's no way I'm leaving till they do something."

[jimfinster]

"I haven%u2019t changed at all%u2026.I%u2019m still doing the same thing," he says. "I go in, buy a lot of stock in an undervalued company. It helps the other shareholders a great deal."


What a philanthropist! A regular Mother Teresa he is!

[jjarden]

I used to be an Ayn Rand disciple, and used to think that if the "Clever," who had all the advantages growing up, made a killing while everyone else suffered financially, then so be it, they "Worked HArd" for it...and then I grew up and finally realized and understood what JK Galbraith said, that "the rich are always searching for a moral justification for their selfishness," and now I absolutely think that "re-distribution" of wealth is the ONLY fair and logical way for a Democracy to survive. The alternative is a "Winner-Take-All" society, and the creation of a Banana republic, which is what America is going to turn into. You cannot tell me or anyone else that an intelligent child, born into wealth, and the child of intelligent parents, having received the BEST education mooney can buy, is on the same playing field as a child who is not that bright, born into a lower class, to parents that are not that intelligent. WHY should the first child have ALL the advantges just because, as Warren Buffet sayd, he/she was "born into the lucky sperm club." NO...that child with all the advantages in life should NOT be able to accumulate OBSCENE wealth at the expense of other less fortunate people. And don''t give me this *** about the lower classes pulling themsleves up by the bootstraps like "ALL" the wealthy people have done. Bunk!

[olebd]

What is this? A brag piece because some rich guy got lucky? Even though he technically made a mistake. I say he should take a mandatory retirement. Then, let him keep, say $10 million of his assets for retirement and the estimated time he has left to live. The rest, disburse to benefit the rest of the country. There I go dreaming again.

[stellategang]

Carl icahn is a genius--and if you actually looked into his past you would see he wasn''t born into wealth. He grew up in Queens, went to public school, etc. He dropped out of graduate school to go to wall street.

You people need to stop your whining. Icahn fought, risked and worked hard for everything he''s made. We should respect him.

The world doesn''t owe anyone a dime. That''s the "comsic law" . . . the sooner you people realize this the faster you will stop complaining and the more you will respect those fought tooth and nail to make their fortunes. You people obviously have never had to fight for anything . . . you probably never had to earn anything either.

Everything around you was built by entrepreneurs. Icahn is an entrepreneur, he''s just in finance.

Some Advice:

1. Stop whining
2. Actually READ Icahn''s bio
3. Be an entrepreneur--to actually understand how hard it is to actually be successful--
4. Once you''ve ACCOMPLISHED 1-3, you''re free to whine away

[jjarden]

stellategang.

You are a poster child for Ayn Rand. Unfortunately you haven''t grown up yet as you sound VERY selfish. Your justification for ONLY Entrepreneurship Matters is misguided. Not everyone can be an entrepreneur (Who Will be the Workers, You Dope!) No one said Carl Ichan was born into wealth. I didn''t. My only contention was that those born into wealth, and those who achieve OBSCENE wealth OWE something to society, which you obviously don''t agree with, because you are selfish. OK Mr. Entrepreneur, what''s your solution for the "Winner-Take-All" society and the formation of a "Banana Republic"? You tell us. I thought so. Your mental faculties are just as vacuous as your delusional proposition of "just get to work" on "Entrepreneurship" and stop whining and everything will be ok. I bet you haven%u2019t even taken the time to study the issue in detail. Have you even read Locke? Hume? Mill? Rousseau? Smith? Ricardo? Keynes? Friedman? Thurow? Galbraith? Hayek? Mises? Marx? Rawls? I thought so. You are an Economic Dilettante who blabbers about stop whining and pull yourself up by the bootstraps but don''t have a Clue as to what''s REALLY going on in the world. Do some studying, and then maybe your eyes will be opened. By the way, thought you''d like to know that I AM an Entrepreneur with 40 employees. Been at it tooth and nail for four decades. I''ve seen a lot of things along the way son, and let me tell you, you don''t have the slightest idea of what you are talking about.

[harp1963]

I wonder if Carl is going to buy up Mylan Pharmaceutical?

[eyemdope]

Thanks jjarden, for putting stellategang in his place so I didn''t have to. He''s obviously a dolt, but I love your label ''Economic Dilettante'' far more.

I always thought that "lucky sperm club" quote was from Donald Trump, which I remember from reading his autobiography as a young Ayn Rand acolyte myself before gaining some perspective as an autodidact and through entrepreneurship like you. But it makes far more sense that he pilfered it from Warren Buffet, so I''m sure you''re right.

[harp1963]

Mr. Icahn,

Just watched your segment on 60 minutes. A humble executive, wow! I wish you would have bought Mylan.

[davedenali]

I''m not sure which is more nauseating: watching Leslie Stahl take take cheap, biased shots at Democrats, or watching her fawn over a pig like Icahn. You could say it''s a toss-up.

[foleywalsh]

Icahn says he''s for the country, but he''s full of bull. He''s only for himself. He''s never shown any interest in truly improving the U.S., just his bottom line.

[foleywalsh]

And as a follow up, a true philantranpist would donate an awful lot of those billions. Maybe he has. But you would think he''d like to balance the negative press he gets. But then again, considering things, he probabaly does not consider it negative.

[twa3891]

As a retired TWA pilot I look forward to living long enough to **** on Icahn''s grave. I''ll probably have to stand in a long line and wait my turn.

TwoDogs

[coyotl1]

one comment on the interview with Carl icahn.

I cannot believe you featured such a selfish, self-absorbed human on your show, without even giving a voice to any other viewpoint. He represents all is wrong with America today. Showing his wife in a fox fur rubbed salt into the wound: the cruelty of the fur industry next to a "entrepreneur."

Eat the rich...

[allyrob49]

Why doesn''t someone ask Mr. Icahn about the thousands of working families left out in the cold so he can come in and HELP loose their jobs. Check out American Car and Foundary in Huntington WVA. Once one of the largest emplorers in the Tristate Area of Ohio Ky WVa,employing thousands and now it''s a skeleton factory with about 100 employees. Ask the thousands of retirees from ACF Industries about how their pension is now less than half what it started out and about thier Insurance costs that have quadrupled . Ask him if he even knows about what happens to a company after he''s made his millions. Come on Leslie do some real homework!

[supascience-2009]

The Ichan story was a good look at the life and times of a billionaire investor. It was a cute piece. You should have took a hard look at how many companies, beholden to stock investors, make moves that are detrimental to their 2 to 5 year plans in attempts to boost daily and sometimes hourly stock prices. It may sound counter-intuitive but today many executives have to choose between keeping the somewhat ignorant investors and analysts happy and doing what is in the best interests of their company.

This represents all that is wrong with this predatory capitalism that Ronnie Raygun unleashed - in the flesh.
Viewing any enterprise as nothing more than a return-on-investment entity is obscene. Product quality, jobs, community are priorities, too.
Predatory capitalist reptiles like this one are, as far as I''m concerned, every bit as un-american as pure socialism is.
But I suppose we should all admire him for making Paris Hilton a little richer...

[gmond]

Icahn''t lift me

[juniper67]

How ironic the Icahn story followed one about a man who may have been wronfully incarcerated. As an aviation enthusiast I watched how Mr. Icahn ran the once proud TWA with little regard for anything but his own pocket. His jumbo-jet sized ego makes Donald Trump look humble and Ms. Stahl did a disservice to the integrity of 60 Minutes by obviously fawning over him. Carl Icahn can build all the playgrounds he wants but Robin Hood he ain''t.

[bc0369]

i would have liked if lesley stahl had more quetions for carl''s wife.someting was going on there.

[skeezix06]

The philosophy that short term profits trumps all has been quite harmful to the country. For decades now, we''ve not taken the long term view of business building and running and it''s pretty much ruined us.

[snadaskay820]

Ask Mr. Icahn if he can do something about the Executive bonuses at Washington Mutual. The stock price has plummeted, enormous amounts of foreclosures and jobs lost, but their huge bonuses remain intact.

[forthepeopl1]

Carlyle Capital had leveraged $670 million in equity 32 times to finance a $21.7 billion portfolio of highly rated mortgage-backed securities issued by U.S. housing agencies Freddie Mac and Fannie Mae.

The company, to establish financing for the deals, entered into repurchase agreements with banks in which it would post the mortgage securities as collateral in exchange for cash.

If the value of the security held as collateral falls, the lender has the right to ask for more collateral -- a "margin call" -- to secure the loan.

If the borrower does not meet the margin call by putting up more collateral, the lender may sell the security.

so all the banks used the inflated houseing prices to get large sums of cash, our mortages that they lied in the first place saying a home is valued at 400000 or 500000 and it was really worth 200000, then go to investers and say look we have so much equity that if they go bad we still make billions..OOPS THE VALUES HAVE COME DOWN TO WHAT THE HOMES ARE REALLY WORTH, OOPS, WHAT DO WE DO?????? LETS JUST RIGHT IT OFF...NO MATTER THE GOVERNEMNT WONT LET US GO DOWN..

GREAT JOB..CONGRESS HOW ABOUT SAVEING US AMERICANS INSTEAD OF THE ONES THAT LIED AND CHEATED US...

[missash9]

Having known Carl Icahn for 55 years I congratulate Leslie Stahl for getting to the personality and character of the man. The grad school he dropped out of was medical school. Along with him, I was a pre-med at Princeton. We pre-meds used to kid our non medical friends about how they ever expected to make a living. What a hoot, in retrospect. Despite his vast wealth, Carl is as humble today as he was as a freshman at Princeton, coming from a public high school in Far Rockaway. He found his niche and was extremely successful at it. His philanthropy extends well beyond what was mentioned in the interview. He donated many millions to Princeton for the establishment and building of a bioscience laboratory. The fact that he still enjoys the "game" is to his credit. Go Carl!!!! And, thanks Leslie, for getting to the essence of the mensch......respectfully submitted, Joseph Glass, M.D.

[jpjnh]

While Carl was sucking the life out of TWA it was said by some employess that "calling Carl Icahn a businessman, is like calling a termite an interior decorator".

Icahn hasn''t just ruined TWA. Look at some of his other corporate raider personas and the lives he''s more or less ruined in the more recent past.

Thanks Carl, I very much dislike what you''ve made of my company. "unlocking shareholder value" indeed.

[ehmarsh]

While the story regarding Mr. Icahn was interesting, it would be better if 60 minutes or other CBS news investigator would dig into the agreed salaries of CEOs when they are hired. Such as the Brian Leach of Citibank. Once they have a contract there is not much anyone ccan do

[twa16]

As a retired TWA employee who experienced Icahn''s reign of terror while he owned the airline when he stole everything that had a dollar sign on it,including my pension,I will not only urinate on his grave daily,but I will also play the tune"UP,UP and away" as the stinch of my bowl movement will reach his nostrils while he is in hell, just to remind him daily how he screwed thousands of decent people here on earth.That will certainly be an Icahn lift!!!Mrs. Stahl I am ashamed of you!!!

[doug4smith]

Nice piece on Icahn. It would be nice if your final comments were accurate regarding Motorola stock. The closing price of Motorola the Friday before the piece ran was $9.26. That is up from the $6.80 low a month earlier. That''s a 36% improvement since Icahn was voted onto the board. Leslie''s final comments about Motorola stock not responding with the Icahn lift are simply inaccurate. Thanks Carl Icahn - I''m a Motorola stock holder! Keep up the great work! Today the stock is at $10.12 - up 49% bump!!