The Icahn Lift

60 Minutes' Lesley Stahl Profiles The Billionaire Investor

(CBS)  Icahn, along with his son and the 40 other analysts and lawyers in the firm, work long hours looking for more companies to target.

They also work on Icahn's $8 billion hedge fund. To get into it, investors have to pony up a minimum of $25 million. After the fund had been averaging gains of 30 percent a year, it slid to just 7 percent last year.

Asked if anyone has questioned whether he is losing the touch, Icahn told Stahl, "Nobody calls me - they don't call me. I don't know."

"Can we read anything, though, into just 7 percent?" Stahl asked.

"Some years you’re going to make 70 percent, some years you’re going to make 7 percent. You should always do better than the market, and you shouldn’t lose," Icahn told her.

But he doesn't always win at everything. He actually lost a big one recently when he moved against the multi-media mammoth Time Warner, growling that the stock price had barely budged since the merger with AOL.

He wanted the respected CEO Richard Parsons replaced, along with all the other directors, and the company split into four parts. Icahn didn't get his way. It was David vs. Goliath, and Goliath won.

"There are people who say that you got in over your head with Time Warner. That you didn't understand that business," Stahl remarked.

"It's a little bit of he who laughs last. I mean, well you know, maybe I made a mistake but I made $300 million on it. So is that too bad? Okay. I mean you know, so I guess I was wrong," he said.

He was wrong in the shareholders' eyes: they backed CEO Richard Parsons, who had argued that Icahn didn't care about the quality of the company’s movies or magazines - or its people.

"Did you care about the products or the people?" Stahl asked.

"I do care about the people, I do care it, but I care about it in a macro way 'cause I see our country going off a cliff. Okay? And I feel bad about it," Icahn replied.

"I'm asking you this because one of the big raps against you is that what Carl Icahn wants to do is go in and get a fast, quick profit out of the company. And he doesn't think down the road," Stahl said.

"Yeah, but I can only talk facts," Icahn replied. "In every company we've gone into that we get control, we put millions and millions of dollars into them."

It's true: sometimes he takes over bankrupt companies, like a chain of Nevada casinos, puts millions into them and turns them around. But more often, he buys up a stock, agitates to get the price up - the Icahn lift - and gets out.

"I make money. Nothing wrong with that. That's what I want to do. That's what I'm here to do. That's what I enjoy," he told Stahl.

"You tell me you're a shareholder activist," Stahl said.

"I don't say - the name is the same. An activist is the same as a raider. You call it whatever you want. A rose by any other name," Icahn said.

Icahn said he hasn't changed "one iota."

"I’m still doing the same thing. I go in, buy a lot of stock in an undervalued company. It helps the other shareholders a great deal. But I'm not putting myself in a cloak and saying, 'Oh, shareholders, you know, I'm doing a great job for you,'" Icahn told Stahl.

"You don’t do it for the other shareholders, you do it for you - but it does happen to raise all the boats?" Stahl asked.

"It helps," Icahn replied. "It helps the shareholders immensely."

Icahn also hopes to help shareholders with his latest move. As a big holder of stock in Yahoo, Icahn was outraged when the internet search company spurned takeover bids from Microsoft that he felt would enrich shareholders. Now, he’s forced his way onto the Yahoo board to keep the pressure on for a sale.

But even Carl Icahn can’t insulate himself entirely from the market’s mood swings. Remember all that Motorola stock he bought? It continues to sink in price, despite the company agreeing to changes Icahn demanded.

[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.

[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.

[gmond]

Icahn''t lift me

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...

[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.

[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!

[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...

[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

[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.

[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.

[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.