If you didn’t know before, Transocean LTD (NYSE:RIG), the multi-billion dollar oil and gas driller, cannot do simple math, according to Carl Icahn’s latest letter to his fellow shareholders of Transocean LTD (NYSE:RIG). He also calls the company absurd, delusional, dishonest and several other things.
Transocean LTD (NYSE:RIG) apparently stirred the wrath of Icahn by committing quite the highest form of cluelessness. The company in the latest earnings report did a pretty daring feat and one that it should be given credit for, at least for its blatant confidence. On April 15, Transocean LTD (NYSE:RIG) said that the company produced 54 percent and 171 percent total returns for the period of 3 and 5 years.
Icahn calls this an outright lie and alleges that even simple math can tell that in those periods the total return was merely 4.7 percent and 73 percent. In addition, Transocean crossed the line by saying that they have outperformed their peer group, which again infuriates Icahn as with the actual returns they clearly have not. To Transocean’s credit, they said they had outperformed excluding the Macondo oil spill, so the company is not that delusional.
Here is where one really gets to admire Transocean LTD (NYSE:RIG)’s gust and fearlessness against the ‘terrifying’ Icahn. The company, after it was nicely told by Icahn about its mistakes, revised down the egregious numbers but still insisted on lying. To Icahn’s shock, Transocean’s new returns for the 3 and 5 year periods are now 11 percent and 84 percent. Now that is some serious resolution to keep lying, isn’t it?
The present misdeeds of Transocean LTD (NYSE:RIG) particularly stand out because it knows very well how much scrutiny it is under and Icahn has been waging a proxy war against the board for some time now. At the end of the letter, Icahn urges the shareholders to take up the issue with the board and hold them accountable for their dishonesty.
He also calls them to vote for the Icahn proposal for increased dividend on the Annual General Meeting and vote for Icahn’s handpicked board members. He also says that the wrong returns released in Q1 earnings makes him worry that how many more mistakes have Talbert, Sprague and Cason (Transocean’s current Board members) have made.