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Carl Icahn

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Carl Icahn is a prominent American businessman and investor. He is widely recognized as one of the most successful hedge fund managers in history.

CarlC. Icahn Laboratory Princeton University NewJersey
CarlC. Icahn Laboratory Princeton University NewJersey

Icahn is the founder and controlling shareholder of Icahn Enterprises. This is a public company and a diversified conglomerate holding company. It is based in Sunny Isles Beach, Florida. Icahn has built a massive fortune through his various investment strategies. His net worth is estimated to be between $6.7 billion and $7 billion. Since 2011, he has stopped managing money for outside clients. However, investors can still invest directly in Icahn Enterprises.

Icahn is famous for a specific investment strategy called activist investing. This process involves taking large stakes in companies that he believes will appreciate in value. He believes these companies will grow if their corporate policies change. Once he owns a significant portion of the company, he pressures management to implement those changes. His goal is to make changes that benefit shareholders, including himself. He is credited with making this activist strategy mainstream for hedge funds. This approach allows an individual investor to influence how large corporations are run.

Icahn's early life provided the foundation for his academic and professional career. He was born on February 16, 1936, in Brooklyn, New York. He grew up in the Far Rockaway neighborhood of Queens. His father, Michael Icahn, was a cantor and a substitute teacher. His mother, Bella, also worked as a schoolteacher.

Icahn attended Princeton University, where he studied philosophy. He graduated in 1957 after writing a senior thesis on the empiricist criterion of meaning. He later attended the New York University School of Medicine but left after two years to join the Army Reserve.

His professional career began in 1961 as a stockbroker for the Dreyfus Corporation. He later worked as an options manager and moved to Gruntal & Co. In 1968, Icahn made a major move by purchasing a seat on the New York Stock Exchange. He used $150,000 of his own money and a $400,000 investment from his uncle, M. Elliot Schnall. This allowed him to form Icahn & Co., which focused on options trading and risk arbitrage. His first major success in a takeover occurred in 1978 with a company called Tappan. He forced Tappan to sell to Electrolux and doubled his investment, making a $2.7 million profit.

During the 1980s, Icahn earned a reputation as a "corporate raider." This label came from his actions regarding Trans World Airlines, known as TWA. In 1985, he used pooled funds and bank loans to acquire 50% of TWA. He completed a leveraged buyout to acquire the company entirely in 1988.

American Airlines - N972TW - Flickr - skinnylawyer
American Airlines - N972TW - Flickr - skinnylawyer

To repay the money he owed, Icahn systematically sold off TWA's assets. This process is often called "asset stripping." In 1991, he sold TWA's London routes to American Airlines for $445 million. This sale resulted in a $469 million profit for Icahn but left TWA with $540 million in debt.

Icahn has participated in many high-profile deals involving famous brands. He took control of Marvel Comics in 1997 during a rivalry with Ronald Perelman. He also held significant interests in companies like Texaco, RJR Nabisco, and U.S. Steel. His investments have included major technology and media firms such as Apple, Netflix, and Yahoo!. For example, he sold about half of his Netflix shares in 2013. This move earned him a profit of more than $800 million in less than one year. He also held shares in eBay and pushed for the company to spin off PayPal.

His career also includes significant investments in diverse industries like gaming and biotechnology. In 2007, he purchased a 9.2% stake in the biotech company Telik. He also owned various casino properties in Nevada, such as the Stratosphere Las Vegas. He sold these casino interests to a unit of Goldman Sachs for $1.3 billion. This sale was a massive success, as it was $1 billion more than he had originally paid. However, not all investments were profitable. In 2020, he sold his entire stake in Hertz Global for 72 cents a share. This specific investment resulted in a loss of almost $2 billion.

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