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Carl Icahn on Bloomberg TV - I don't like or respect Bill Ackman

January 24, 2013 | About:
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In a phone interview on Bloomberg TV's "Street Smart," Carl Icahn told Bloomberg TV anchor Trish Regan that he doesn’t "like" or "respect" fellow fund manager Bill Ackman, criticizing the way Ackman publicized a $1 billion bet that shares of Herbalife Ltd. (HLF) would decline.

“You don’t go out and get a room full of people to badmouth the company…If you want to be in that business, why don’t you join the SEC?”



On whether Icahn has a long position in Herbalife:

"I stay away from commenting on positions that we have or we don't have if they don't have a 13D on file. I will duck that question and not say yes and not say no."

On Herbalife, and whether Bill Ackman or Dan Loeb is right or wrong in their positions on the stock:

"Look, it's no secret to the world and to Wall Street - and most guys on Wall Street I sort of like and I get along with - and it's no secret I don't like Ackman. I have no respect for him and I don't like him and that's not a secret. But that doesn’t mean that I'm going to go in and buy stock in a company necessarily just to get him. Frankly, I don't like the way he did this anyway. If you're short, you go short and hey, if it goes down you make money. You don't go out and get a roomful of people to badmouth the company. If you want to be in that business, why don't you go out and join the SEC?"

On short sellers:

"They shouldn't take on the job of being a regulator. I don't think it's Ackman's job to go in and say the SEC should be looking at this and I'm going to show you why it's illegal. If it's illegal, then go to the SEC and tell them it's illegal. But don't go try and make a profit on it.

"What I think is not all at all forthright -- and he's giving all the money he makes on charity - but is he giving all the money he makes for his limited partners to charity? Doesn't that help him a great deal…if the stock goes down and his limited partners make a great profit and he becomes more famous and he gets more money in. So, he's not doing it for charity.

"I wouldn't even say this, but it's no secret, I dislike the guy, I don't respect him, I've done business with him and he wasn't forthright…that's my opinion…But the real thing is, I don't think he did this in the right way."

**CREDIT: BLOOMBERG TELEVISION**

Rating: 4.7/5 (9 votes)

Comments

tokyowalker
Tokyowalker - 1 year ago
Carl Icahn sounds like a childish dick in this interview.

vgm
Vgm - 1 year ago
Icahn was obviously a bit angry, and that was unfortunate, but behind the emotion there was alot of hard-hitting truth. And Icahn is only one among many who have been openly dubious about Ackman's HLF short and the way it was done.

I don't know Ackman the way Icahn does, but I've said many times in this forum that Ackman is certainly not on my personal list of gurus! He puts way too much emphasis on self-promotion and sensationalism, and by far too little on intellectual rigor and analysis. He needs to learn to sit in the corner and THINK deeply and carefully before acting. In my book he's superficial - an average investor masquerading as a guru.
leolord
Leolord - 1 year ago


In this particular case, I am with Carl Ichan. Ackman's behavious of badmouthing a company while he holds a short position does not reflect him well as a decent person. If you don't have a position in a company, then you can say whatever you want to say. The matter the fact that he is trying to make money for himself is always a selfish action. I like Warren Buffet who never made bad comments about a company to make money.
basil2000
Basil2000 - 1 year ago
Icahn let his personal feelings against Ackman distort his reasoning. He doesn't like Ackman, therefore everything Ackman does has to be wrong. It is the same with his idea about Herbalife: Because he thinks you are better on the long side of Herbalife he wants it also to be a good, decent business.
wescileppi
Wescileppi - 1 year ago
Vgm,

I absolutely agree with your post. That people follow or even invest their money with Ackman shocks me. Sure, he has had one or two big hits, but he has had some disasters. He is a little boy who got started with Daddy's money. He has no business on the guru list.
mocheng
Mocheng premium member - 1 year ago
unless you are a billionaire, i don't think it's right to judge a billionaire weather he is wrong :) If that billionaire is a self-made and made his money legally.
batalha
Batalha - 1 year ago
i am not sure i would consider Ackman a guru either. I think from $45/ share up his trade becomes a money losing one. Considering the amount of shares he sold short he may blow up on this one if the stock climbs back up to wher it came from last year.
vgm
Vgm - 1 year ago


Wescileppi,

Thanks. I totally agree about "Daddy's money". Ackman is where he is today on account of family backing and influence. Very little is off his own bat.

Mocheng - I think the answer to your dilemma is in Wescileppi's post. It' not necessary to be a billionaire to see thru Ackman and know that he's anything but "self-made".
vgm
Vgm - 1 year ago
There's more on this from CNBC:

"Billionaire Smackdown. Ackman and Icahn Spew Insults"

http://finance.yahoo.com/news/billionaire-smackdown-ackman-icahn-spew-183647044.html
paulwitt
Paulwitt premium member - 1 year ago


@ Vgm

That was some good TV! It was a little harsh though, with one of them using a bad word..... :)

LwC
LwC - 1 year ago
Bill Ackman vs. Carl Icahn

It started with a "forgettable" deal in 2004, and became a famous feud that spanned seven years and racked up millions in dollars in lawyer fees between two activist investors.

In 2003, when Ackman's former investment firm was in trouble and he was being investigated by the SEC, he cold-called Icahn and asked him to buy his shares of Hallwood Realty, a real estate company trading for about $60, but Ackman said was worth $140. Icahn agreed to buy the shares for $80, with a deal that he would split the profit with Ackman if he sold the shares within 3 years. When Hallwood merged with another company for $137/share in 2004, Ackman called Icahn for his share of the profit. Well, Icahn reasoned that he didn't sell the shares in the merger even though he did not own them anymore.

A legal battle ensued with poisonous words, where Ackman called Icahn a "shakedown artist" whose word was "useless" and also convinced another investor to refuse Icahn's money.

Ackman ultimately won the fight, and Icahn paid out $9 million.

Source: DealBook

Read more: http://www.businessinsider.com/ready-set-fight-here-are-9-of-the-all-time-nastiest-feuds-in-finance-2012-2?op=1#ixzz2J1cIEYej

vgm
Vgm - 1 year ago
LwC - old news.
superguru
Superguru - 1 year ago
Few years Marty Whitman also publicly disagreed with Ackman on one short. Ackman won that round.
LwC
LwC - 1 year ago
@vgm, thank you for your astute observation. But my point is that this is personal between Icahn and Ackman, especially with Icahn who had to pay up. So it may not be old news for Icahn who might still be nursing a grudge, a point that I'm confident most people get.

But of course with you, any point is pointless when it comes to me. So why are you still wasting your valuable time unnecessarily reading and responding to my posts?

Oh yeah, just to be clear that question is intended to be rhetorical, so please feel free to not respond. (I hope that this is not so "unnecessarily verbose" that you are unable to understand it.)

@superguru, that might have been Ackman's very public MBIA short. Whitman was, and maybe still is, heavily exposed to MBIA bonds.

vgm
Vgm - 1 year ago
LwC - actually I did not at all realize that you were the perpetrator of the "unnecessarily verbose". Nothing personal, to use the phrase du jour.

To be brief (!) the issue is that you took one piece from a complex jigsaw and tried to imply it was the whole. Rather, every piece needs to be placed and viewed in context. So here I'd suggest the other extreme of 'unnecessarily simplistic' would apply. Extremes betray an unsophisticated mind at work.

"Things should be made as simple as possible, but not any simpler." Albert Einstein
aldandrea
Aldandrea premium member - 1 year ago
In my opinion, Carl Icahn sounds like the bully in the schoolyard who is furious that Ackman sued him and won. I bet there aren't many people who stand up to King Carl and win. It also sounds like Icahn tells everyone that he's a guy who you can trust to do business on a handshake, just before he screws you. Would you do business with King Carl -- one of the world's most notorious corporate raiders -- on a handshake? I sure wouldn't.

In the video, Icahn comes across as a petulant bully with the news anchor too. He's clearly someone who used to having his way and he's indignant and outraged at being put on the spot or having his methods or reputation questioned.

Sounds like King Carl has a lot of the makings of a sociopath, no? That would fit with his reputation too. No doubt, he wraps himself in a bunch of charity, too, so he can tell you what a good guy he is. Not. I don't have much of an opinion about Ackman.
shb600
Shb600 premium member - 1 year ago
VGM Ackman has "too little on intellectual rigor and analysis?" According to a CNBC reporter Friday Ackman is very detail oriented vs. Icahn being well-known for not digging into the details or reading contracts and it was speculated that's why he prevailed in the court case(hard to believe Icahn's team of lawyers got "fooled" by a 35 year-old "nobody" though). Ackman makes a few stock presentations a year at conferences. They are some of the most detailed thoroughly researched I've ever seen and most are on the long-side. Did you even look at the 300+ slides that he presented on HLF? You may disagree on his interpretation, but to say he isn't intellectual or rigorous in his analysis is ridiculous. Wall Street analysts that sat through the presentation seemed to complain that it was too detailed and went on too long 3+ hours. Wall street is full of company hyping CEOs, analysts, and fund managers on the long-side. The short side is not some nefarious scheme if it is thoughtful and well-researched, like Ackman, Einhorn, Chanos and others do. As Chanos says shorts are like financial detectives. Btw HLF is Ackman's one publicly announced short that I'm aware of since MBI which started over 10 years ago.
vgm
Vgm - 1 year ago
Shb600,

1. You're a fool to believe what you hear from the talking heads on CNBC. That way lies financial ruin.

2. Long doesn't in any way represent rigor. Just the opposite in the case of investing. Read Dan Loeb's rebuttal. It's short, rigorous and exactly to the point. Loeb has the intellect to encapsulate his case in a few paragraphs. As Munger puts it, 'ideas that need detailed analysis should go on the too-hard pile...good ideas jump off the page'.

3. I admire rigorous short-sellers. They are "the policemen of the financial markets" to quote Seth Klarman. Their analysis has to be top notch, since they stand to lose big. Here we agree. Chanos is terrific. He said he's looked at HLF. Let's see if he's actually short. But even someone of the caliber of Chanos can get hurt. He was burned quite recently with Autonomy, when foolish HPQ bought it for a fortune, and he was (correctly) short.

4. If an idea is still working itself out after 10 years it insn't much of an idea. Opportunity cost!
shb600
Shb600 premium member - 1 year ago
VGM,

In response point by point

1. What I said "According to a CNBC reporter Friday Ackman is very detail oriented vs. Icahn being well-known for not digging into the details or reading contracts and it was speculated that's why he prevailed in the court case(hard to believe Icahn's team of lawyers got "fooled" by a 35 year-old "nobody" though)." The reporter was quoting a source who used to work for Icahn. This has no investing implications it pertains to the court case between Icahn and Ackman from 10 years ago. Please explain how that could lead anyone to financial ruin.

2. Loeb is a very opportunistic investor read his past investor letters and see that what he touts one month many times he's out of the next. Munger is talking about buying a company's stock. Shorts and frauds are inherently complicated because it involves deception. The company will not lay out the case as to why it should be shorted. The short-seller will have to dig beyond the reported numbers and get at what is truly going on. Chanos short of Enron didn't "jump" off the page at him or the rest of Wall Street.

3. Reading between the lines of Chanos interview I'd guess he's short. I wonder where you think Ackman is wrong. Is the product not egregiously over-priced, are 90%+ of distributors not being taken advantage of, is the CEO not making incorrect statements of fact on TV that he later has to retract, are they not changing the way they report certain metrics, did the Netherlands not rule they were a pyramid scheme, did they continually have to go to new countries to enlist more distributors to keep their numbers from declining? The list goes on and on with the problems.

4. By my calculation MBI took about 6 years to go from 60 to 3. If an investor were long to make up for that loss he needs a stock to go up about 20 times. MBI was a good stock to avoid. Also, I believe Ackman was long Credit default swaps and made several times his money. If you are a hedge fund are you not expected to have some hedges, like shorts otherwise what is the point of being a hedge fund just be a mutual fund

vgm
Vgm - 1 year ago
Shb600,

1. I repeat: you're a fool to believe what you hear on CNBC.

2. Loeb is credible and rigorous. He may be in and out quicker than others but why is that wrong? You use "opportunistic" in a pejorative fashion. Not so. Buffett very recently remarked that one of his new managers (it's almost certainly Combs) moved his positions around quicker than Buffett himself would do, but then commented that there's not only one way to make money. Arguably the very best analyst out there, Steve Mandel, can buy and sell and buy again quarter upon quarter sometimes. He's fabulous and fabulously successful.

You do not know how easy or difficult it is/was for Chanos with his shorts. You're guessing. Wall St are always nowhere! If you stop and think about it, companies do in fact give out the information necessary to assess a short. The short seller just needs to know what figures to look for. But, as I said already, and you repeated, they have to be sure of their conclusions, very sure.

4. Your "reading between the lines" is your business. Don't bother me with it. For everyone agreeing with Ackman, there are two naysayers. You cannot conclude anything from what Holland is saying. Holland versus Loeb and Icahn? C'mon!

5. On MBIA, you're speculating (again). Nothing personal, but it's not worth reading.
shb600
Shb600 premium member - 1 year ago
Vgm,

1. Ok I'm a fool to believe that a reporter on CNBC says she spoke to a source who used to work for Icahn who said that Ackman got the better of him in the lawsuit because Icahn is not a detail person. You believe she is lying and has no source or that the source is lying and that Icahn is a details type person? Icahn is a fabulous investor, but it's been widely reported that he doesn't care for the nitty gritty. For better or worse that is his reputation, although it has worked out to the tune of $14-$18 billion net worth for Icahn

2.I don't use "opportunistic" as a pejorative. I only believe that if Loeb thought HLF was a great investment he had plenty of time to buy it below $45 during the last year, but he didn't until Ackman made his presentation and HLF went down 40%. I'm sure Loeb will make a lot of money on the trade. Point being he's not sticking around for the long-term. The NY Post reported he's short NUS, which has similar problems as HLF. If he loves the business model why short NUS. Apparently Loeb dislikes Ackman also. Which was pretty clear in his quarterly letter. Interestingly Ackman made fun of Loeb's love of surfing at a conference one time. Could he really be that thin skinned? Agreed Mandel is one of the best. Wouldn't it be great if he shared the details of his trades to the rest of us. I've never found one investor letter or detailed presentation he's made only very sparse details.

Here's a link to Chanos testimony to Congress detailing the incredible amount of work his firm did on Enron.

[url=valueprax.wordpress.com/2012/01/23/lessons-in-short-selling-why-jim-chanos-targeted-enron/][/url]

It did not jump of the page. So yes I do know that it was complicated work. Unless you also think I'm a fool for believing Chanos testimony. These hedge funds wouldn't have 50-100 or more employees working for them if this stuff just jumped off the page. Munger and Buffett can do it by themselves few can.

3. Reading between the lines Icahn won't say he's long Chanos won't say he's short. Einhorn wouldn't say he was short for 7 months. It seemed pretty clear he was and he just said on a conference call he was short he made money and covered. Seems pretty clear Icahn is long and Chanos is short.

4. I'm not speculating about Ackman's position in MBI. there was a book written about it that he mentioned during the interview Friday called Confidence Game. It tells the whole story of the MBI short. Here's a link to the bloomberg story that says Ackman was lond CDS on MBI and could make a profit of 5 times his entire funds assets. I'd say he wasn't hurt by any opportunity cost as you suggest.

www.bloomberg.com/apps/news?pid=newsarchive&sid=aLmOb9zzVZ9A

But I guess you will claim the author of the book is making it all up and the Bloomberg reporter as well and I'm a fool to believe either even though there is a long public record to back everything up.

I'm going to make a prediction you will love Loeb and Icahn both make a ton of money on their short-term trade in HLF. Yet ultimately the Ackman thesis plays out and he is vindicated. The consensus wiew is only the courts ruling that HLFis a pyramid scheme creates a win for Ackman. HLF is also a huge loser if the govt regulates it like it has the for-profit education companies(and no buyback will save them it hasn't saved the education stocks) or there is so much publicity that distributors drop out by droves.He probably won't be sharing anymore ideas after this. Which is too bad because he's a very long-term investor who is willing to share his ideas in detail. He shared his long in GGP that including spinoffs went up well over 20fold and he is still long 5 years later. Wish all great investors were as forthright in sharing there ideas. Most would prefer to operate in the shadows. Chanos has said he doesn't believe managers should have to make public any of their holdings. He's right they shouldn't. But the rest of us who don't have teams of analysts,legal experts, hire outside consultants to do research and channel checks, and years of experience can learn a lot from them while they still do. Oh wait this stuff just jumps off the page. And Ray Dalio is wasting his money on 1500 employees. Is he another fool?

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