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."

[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!!

[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!!!

[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

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.

[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".

[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.

[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...

[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.

[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.

[bc0369]

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