Carl Icahn, Icahn Enterprises chairman, explains why he sold Lionsgate stock. He also offers insight on MF Global and his battle for CVR Energy.
Since the financial crisis, Warren Buffett's Berkshire Hathaway has had significant exposure to financial stocks in its portfolio. Q1 2021 hedge fund letters, conferences and more At the end of March this year, Bank of America accounted for nearly 15% of the conglomerate's vast equity portfolio. Until very recently, Wells Fargo was also a prominent Read More
among the big strong gainers. meanwhile carl icahn, a big gainer himself, the billionaire activist investor has made his name taking stakes andenforcing change by management. he missed out on an opportunity of lions gates. after opening the stock for three years he sold it last year and it’s now nearly doubled. his 3% position helped, of course, by the success of the thrillthe hunger games film. that would be nearly $345 million that he left on the table. what was behind the missed opportunity for lions gate and where is carl icahn putting his money today? we bring on the man himself. carl, it’s great to have you on the program. thanks very much for joining us. thanks for having me, miss maria. $345 million left on the table. what happened? why did you sell it last year? were you not anticipating a big performance this year? you can’t win them all and i sent those guys an e-mail congratulating them. you know, it’s very hard to pick stocks but it’s impossible to pick the right movie. we just looked at the numbers, and when it was seven, unless lionsgate had that big hit, we’d have problems so we took that opportunity. honestly — and i congratulated them. we were ong. but you can’t win them all, that’s for sure. but we are pretty proud of our performance in 2011. we were up 35%. that would have gotten us up 37% so i’m not demeaning it. 35% gains in your last year’s portfolio. pretty impressive numbers, carl. what’s behind it? can you attribute it toward any one or two companies? activism doesn’t work — it works in spurts, and sort of everything we had been working on, the motorolas — motorola went up and biojen and regeneron and el paso, chesapeake, you know, they all worked in last quarter, so we made well over — i’m proud of it for iep. it hasn’t been noticeable, the stock price of iep. but we made a couple of — a couple billion dollars. well, on iep, we made better than a billion. but the issue is it proves my thee says over the years that a lot of companies have a lot to answer to. there’s no accountability. so the whole system is still pretty dysfunctional with many, many exceptions. well, you’ve really got to push for accountability which is something you do so well and i think other share holders are grateful for that. let me ask you about this quarter because last quarter you had a lot of victories. let me ask you about your battle for cdr energy. you had some objections from management. do you think there’s a lot more upside here? it’s a good question, but where i made the most money interestingly is not just buying stock bus trying to get control of companies. if you look back when i brought at it. it was in terrible shape. we bought it for $300 million. three or four years later we 3 billion and we sold a bunch of energy companies nobody liked. we merged them together. this is about 2000. a few years later sold them for $1.5 billion. there’s a great opportunity in controlling companies like cdr but they have unquestionly have storm cls ahead. it’s going, i think, narrow. so that’s a negative. that’s a negative, so you’re very right. they have problems ahead, but, in the long run, if you can hold out on it, well, short run, you might be able to sell it. i think there’s a chance to sell it. i think it will be okay. but short run, i’m not arguing with you. are you expecting a proxy fight here for control of cbr? in the sense of it’s not really a proxy fight. it closes in a few days. if you get 51%, we’ll go on to have a proxy fight but we don’t really, i don’t think, solicit much because with 51% in the nd so to speak we can win and the board will remove the poison pill and the board will remove immediately at this point. the management is tells shareholders that the offer is inadequate. how much more are you willing to go here? you’re bidding 30. would you go to 35? yeah. i’m certainly not going to discuss that on tv, but i will tell you this. i think you were sort of right, that it’s a very difficult energy market. thing we’re paying a very full price, a very full price. i mean, you know, the ceo himself has been selling stock at 25. so i wonder how you reconcile that with saying it’s undervalued at 30, but in any event, i like the ceo. it’s not a personal thing. that bid in the next couple of days, what u your timeline on this. ‘ll probably walk away, not committing to that. we’ll have to thing about it. if we don’t get 51%, there’s many, many opportunities throughout. let me ask you about mf global. obviously you were one of the former clients of mf global. you got 72% of your money back. that’s good news. but what about the rest of the money. what are the prospects of getting the rest of that money back. we really — i mean for our portfolio and for our capital, it wasn’t a big thing. we had one trader that used mf global obviously, and he made us a fair amount of money, so we’re sort of breaking even on the whole situation. you know, we’re not leaving very much on the table. but obvious let’s a sad situation. you can only say that, you know, i like jon corzine quite a bit and you hope there’s nothing really, you know — i would think with jon, you know, it was a sort of a — you know, at the end it was chaos there and it was probably a honest thing that happened. were you surprised by the recent reports that he directed under lings to actually move the money from the segregated accounts? have you heard fro jon corzine recently? i haven’t spoken with him recently. i’m not the right guy to ask. like i say, i like jon, i respect him, and i’ve known him for years. even though we lost a few bucks if we have lost it indeed, you know, i’m not here to criticize jon. you know, i’m not going to be brought into that because i really don’t know. let me get your take on some of the other areas. commercial example. i wonder if the rally is over for some of these companies and the whole mining space that’s been so hot for so long? where are we as we hear china is slowing down and perhaps the low hanging fruit has been picked? yeah. look. i think the low-hanging fruit is has been picked in the market. in other words, you’ve had this huge rally, a rally because there’s so much capital around. i think bernanke did great job of bringing us out of ’08. but think now on a global basis, i just wonder how much — how much can you just keep getting for printing money as you do in europe and here. basically that’s what you’re doing. up to a point, you do it and it’s a good thing, but if it was that easy, then we’d never have recessioanymore. it’s like curing cancer. we got rid of the problems. i don’t think it’s that easy and you worry that something will give somewhere. but i certainly am not smart enough to say when and how. so are you expecting a tough year forhe broader market this year because of where we are? i mean today bernanke said once again, you know, he’s worried that higher oil prices could actually put a crimp in growth. well, look. you have higher oil prices, you still have high unemployment, a terrible housing market. you have all these things. but the one thing you have going for this market is this very, very, very low interest rate. so, you know, the average guy who says, gee, i can’t make any money keeping it in the bank so i’m going to buy stocks. ‘s a very dangerous way to look at things and i think the average person doesn’t quite understand that. you know, it’s better to make 1% than lose 30%, you know or lose 20. you know, you did have that tremendous downdraft in ’08, and it certainly could happen again. so i’m not one to — i’m not really that bullish, but, hey, did what i do. you know, i buy stocks and i — you know, we like to think we buy the underperforming ones and make it happen, you know, make things change. you’re looking at real businesses. carl, always nice to have you on the program. we so appreciate your time. great talking with you. coming up one of the top funded managers on wall street