Meet The Icahnator: This Is What Happens When You Piss Off A Billionaire On Prime Time TV

Tyler Durden's picture




 

Everyone recalls the slow motion trainwreck from the afternoon of January 25, when in an epic bitchfest, hedge fund titans Bill Ackman and Carl Icahn screamed at each other telephonically for about an hour on CNBC in what was nothing but one big pissing match. Just over two weeks later, Icahn forced a major squeeze in the stock when as we wrote previously and as we predicted, he disclosed a massive 13% stake, or some 14 million shares in the company built up through stock and calls (essentially costless thanks to Icahn's recent profits on Netflix). What many may not know however, is that for Icahn, the HLF stake was nothing more than a $500 million dollar impulse buy. Why? Because as the chart below, which breaks down the cumulative purchases of HLF stock by various Icahn's funds, shows, the billionaire only held some 1.7 million shares until the January 25 afternoon of his screamfest with Ackman. Then the Monday after the feud Icahn went ballistic, and proceeded to buy some 120,000 shares on Monday and 197,459 option-equivalent shares, after which he tapered off his stock purchases while ramping up the call buys, and buying an epic 10 million share-equivalent calls in the next two weeks, without pause, compassion or remorse, and with just one thought: crush, mangle and destroy Ackman!

Of course, by buying calls instead of stock, Icahn never gave a hint to either markets or dark pools what he was doing (although we commiserate for whoever sold all those calls in bulk as they are now facing tens of millions in margin calls). The other issue is that since Icahn does not control the shares outright, he can't call them in and thus force the "epic squeeze" that would befall the stock if the float was suddenly less than the short interest.

Unless, of course, he and others exercise any of their in the money shares, demanding the physical underlying shares.

But the bigger issue is that the chart above shows for Icahn the HLF purchase is nothing but an escalation of the previous grudge match, with no regard for the fundamentals, and the impulse buy was, paradoxically, driven precisely by Ackman's dare to tender for the company. Because he wants to, and because he can: for Icahn $500 million is literally pocket change.

To loosely paraphrase the Terminator:

That Icahn is out there. He can't be bargained with. He can't be reasoned with. He doesn't feel pity, or remorse, or fear. And he absolutely will not stop, ever, until Ackman is destroyed.

Behold: the Icahnator

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Fri, 02/15/2013 - 13:15 | 3246813 ShortTheUS
ShortTheUS's picture

Bill is getting Ackmanhandled by the Icahnator!

Fri, 02/15/2013 - 13:19 | 3246833 BKbroiler
BKbroiler's picture

If you were in your late 70's and worth 14 billion, would you really be getting into pissing matches about money?  kinda sad.

Fri, 02/15/2013 - 13:22 | 3246854 Alpha Monkey
Alpha Monkey's picture

The ego is a funny thing.  It's kinda sad they are worth 14billion imo.... another result of their overpowering ego, again imo.

Fri, 02/15/2013 - 13:31 | 3246873 hedgeless_horseman
hedgeless_horseman's picture

 

 

Just like magic...

Herbalife Cell Activator Supports our body’s absorption process of micro-nutrients and promotes energy production at the cellular level.

If you want to see someone have an embolism, then ask a cell biologist to respond to this claim.

 

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It was really vile weather when we got to tarred and feathered
You could hear the six guns sound as they chased us out of town

The stuff we sell is just the best
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When all around you seems like hell, just one sip will make you well
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Nowadays it's used medicinally for all known human malady
It was really vile weather when we got to tarred and feathered
You could hear the six guns sound as they chased us out of town

 

Fri, 02/15/2013 - 13:31 | 3246899 fuu
fuu's picture

It's awesome when "markets" are just two little girls fighting over a locket.

Fri, 02/15/2013 - 13:38 | 3246920 Divided States ...
Divided States of America's picture

Its good when these jews are finally trying to gut each other out...I wish they would do that more often.

Fri, 02/15/2013 - 13:41 | 3246926 idea_hamster
idea_hamster's picture

So Ackman goes logically and methodically (good) short based on the threat from US regulatory action (bad).

Icahn goes full-tilt emotionally (bad) long based on no such threat (good).

Honestly, I'd like to see Ackman come out the winner, but betting on SEC or DOJ doing their jobs is a risky, risky bet....

Fri, 02/15/2013 - 13:49 | 3246971 slaughterer
slaughterer's picture

If the SEC/DOJ successfully prosecuted Herbalife as a Ponzi, then, by legal extension, there would 200-300 copy-cat knock-on lawsuits against the Fed for the same crime.   After all, ain't QE kind of like... buying/selling a Herbalife meal? 

Fri, 02/15/2013 - 13:59 | 3247003 TruthInSunshine
TruthInSunshine's picture

Herbalife is an organization that induces "commission-based salespeople" to sell snake oil health supplement "products" to customers (i.e. their family, relatives and friends) using the highly effective methods of guilt, pity & charity developed by the Girl Scouts in their efforts to sell cookies.

Unlike the Herbalife products, the Girl Scout cookies succeed in their advertised and intended purpose.

Fri, 02/15/2013 - 14:08 | 3247056 11b40
11b40's picture

.........and Girl Scout Cookies benefit a worthwhile cause.

Fri, 02/15/2013 - 15:03 | 3247201 Careless Whisper
Careless Whisper's picture

Icahn is old school. 1980s. J.R. Ewing. I like his style.

Fri, 02/15/2013 - 15:23 | 3247295 JR
JR's picture

Yes, if promiscuous sex with abortion is the cause you would have inculcated in your girls. .

As reported by  C–Fam, the pro-life watch dogs at the United Nations, the Girl Scouts had a meeting for girls only at the UN om 2010 which included a Planned Parenthood guide for sex. It was a no-adults-allowed affair; any adult not associated with the Girl Scouts was kicked out.

Said Cathy Ruse: “The Girl Scouts have been officially ‘pro-choice’ for years. Now they’re pushing promiscuous sex on the girls. Here’s an excerpt from page 11 of the Planned Parenthood guide offered at the secret meeting:

'Some people have sex when they have been drinking alcohol or using drugs. This is your choice. Being drunk or high can affect the decisions you might make about sex or safer sex. If you want to have sex and think you might get drunk or high, plan ahead by bringing condoms and lube or putting them close to where you usually have sex.'”

In America's new Ruth Bader-Ginsberg culture, the Boy Scouts are a no-no; the Girl Scouts a yes-yes. Good luck.

Fri, 02/15/2013 - 15:37 | 3247371 BidnessMan
BidnessMan's picture

I was born 40 years too early....

Fri, 02/15/2013 - 15:57 | 3247446 Pure Evil
Pure Evil's picture

Don't forget the Girl Scouts promotion of homosexual lifestyles, which the Boy Scouts are now being pressured to accept. Obviously, both these groups have been targeted by homosexuals as a way to be around children and indulge in their pedophile fantasies. What happened at Penn State with Sandusky would just be a lurid tale compared to what's been going on behind the scences at the Girl/Boy Scouts. In fact the revelations about the coverup of young boys and pedophiles in the Boy Scouts makes the Catholic Church revelations look rather tame. The only thing the Catholic Church has over the Boy Scouts is that they've been at it since priests/nuns were not allowed to marry some few thousand years ago.

Fri, 02/15/2013 - 14:10 | 3247060 slaughterer
slaughterer's picture

T.I.S. +1,000 That was one of your best extended allegories.  Do you have a Ph.D in rhetoric?

Fri, 02/15/2013 - 15:41 | 3247388 gmrpeabody
gmrpeabody's picture

It was good, wasn't it.

Fri, 02/15/2013 - 15:12 | 3247233 Stock Tips Inve...
Stock Tips Investment's picture

They're both very smart and very good investors. I prefer large investors do not have much media exposure. However, in this case I think it was great to hear their arguments ... and see them perform.

Fri, 02/15/2013 - 15:18 | 3247270 ToNYC
ToNYC's picture

The Government doesn't do anything that might affect current cash flows without doing due diligence at the Goldman Sachson's

Fri, 02/15/2013 - 13:46 | 3246959 Larry Dallas
Larry Dallas's picture

And I'm sure that Icahn's LPs are so happy to hear that Carl put his ego aside and used prudence, discretion and thoughtfulness to buy these shares meaningfully; not being rash in his decision at all.

Fri, 02/15/2013 - 13:56 | 3247010 NoDebt
NoDebt's picture

That's what I thought.

Still, I wouldn't have gone and poked that big bear with such a short stick as Ackman used.  Icahn is still fuming over losing that lawsuit to him a few years back.  You know he wants to get the guy.

Ackman called the guy out, Icahn looked at the market cap of HLF, knew from the start he could buy the whole damned thing outright if he had to and decided to pick up the gauntlet that the youngster threw down in front of him.

Game on.  Hopefully Ackman can convince the DOJ or somebody to step in and shut the whole thing down as a ponzi.  Otherwise, I'm afraid Ackman's going to get burned to a crisp on those shorts.

Fri, 02/15/2013 - 14:42 | 3247138 Apocalicious
Apocalicious's picture

He doesn't have LPs anymore. It's just his money...

Fri, 02/15/2013 - 13:53 | 3246992 localsavage
localsavage's picture

Jew on Jew crime.....with million in loses for the looser  ROTLMFAO

Fri, 02/15/2013 - 13:58 | 3247016 caconhma
caconhma's picture

Let them kill each other so the rest of us can live in peace.

Fri, 02/15/2013 - 16:26 | 3247596 Andy Lewis
Andy Lewis's picture

And I wish bigoted filth like you would just drop dead and stop wasting good oxygen.

Fri, 02/15/2013 - 14:46 | 3247147 Mugatu
Mugatu's picture

Why can't these two get a room and just go fuck each other in private!

Fri, 02/15/2013 - 13:47 | 3246960 tarsubil
tarsubil's picture

Herbalife H20 Bio-Solvent Plus. This special blend of a key and essential substance from several diverse sources helps dissolve critical enzymes and micronutrients on a cellular level while also hydrating the body on a cellular level. Only $9.99 for a 4 oz cup of wat... er, I mean H20 Bio-Solvent Plus!

Fri, 02/15/2013 - 13:57 | 3247012 unrulian
unrulian's picture

ahhh....no way...common...is that a real herbalife product? i can get a 6 oz bottle of designer water for half that price

Fri, 02/15/2013 - 14:04 | 3247039 derek_vineyard
derek_vineyard's picture

dont fuck with those rich old fuckers......taking it personally is the only jolly they have left

Fri, 02/15/2013 - 13:24 | 3246870 fonestar
fonestar's picture

Icahn & Ackman, the term "legends in their own minds" comes to my own mind. 

Aging egomaniacs gambling with other sheople's money.

Fri, 02/15/2013 - 13:55 | 3247000 nope-1004
nope-1004's picture

Does either of these two "billionaires" contribute to job growth?  Or are they just high stakes gamblers?  Looks to me like one is a chip bully intent on forcing another players hand to grab their stack.  A wee bit greedy, but that's called "success" these days.

Of course, poker players don't produce jack-shit either, so the analogy is quite applicable.

 

Fri, 02/15/2013 - 13:27 | 3246885 N. B. Forrest
N. B. Forrest's picture

You're missing the point.  When you are in your late 70s and worth 14 Billion, the point is to have fun, not necessarily make money.

 

He was dissed by a young buck and he will have fun making the young buck pay for disrespecting his elder.  I think it's great fun to watch, not the lest bit "sad".

Fri, 02/15/2013 - 13:31 | 3246898 kliguy38
kliguy38's picture

Funny how Nature will have the last laugh on Icahn as Ackman pisses on his grave.......THAT is how it will end for this slimy soap opera......It's a morality play with NO morals

Fri, 02/15/2013 - 13:34 | 3246904 BKbroiler
BKbroiler's picture

You're missing the point

I think you're missing my point.  If at that age and wealth you have nothing to do but inflate a stock to try and ruin another billionaire, you're obviously missing more meaningful endeavours.

Fri, 02/15/2013 - 13:42 | 3246942 N. B. Forrest
N. B. Forrest's picture

I'm not saying that my idea of a good time, but it's obviously Carl's idea of a good time.  A lot of times old people just don't care anymore and will do what ever the hell they want to do.  You know the red-hat-and-purple-wearing-ladies. You may think that old billionaires should go to the synagogue and study the Torah, but obviously Ichan has a different idea of how to spend his sunset years. 

Ackerman was just plain dumb to piss off a Billionaire who doesn't give a fuck. 

Fri, 02/15/2013 - 13:58 | 3247013 Blano
Blano's picture

I think Kirk Kerkorian was around or pushing 90 when he made his play for Chrysler.

Fri, 02/15/2013 - 17:23 | 3247790 ZaphodBeeblebrox
ZaphodBeeblebrox's picture

If I may, I think Kerkorian was more sad. I don't right remember all the details but it was of interest because the legal battle played out in my home town. Kerkorian was in a fit about how the DCX merger went down. From what I understand he went through some grueling witness box time for a man in his mid-80s(2006). All for what, another $1billion at best and the principle of the matter. Even if wasn't a wearisome time, it certainly used up the one commodity he can't buy. Icahn is younger and doesn't have to be tied for more than what it takes to push some buttons or tell someone else to. I'd watch/read this over some made up bullshit reality like Jersey Shore or Biggest Loser, any day of the week.

 

Fri, 02/15/2013 - 14:00 | 3247026 eatthebanksters
eatthebanksters's picture

and?

Fri, 02/15/2013 - 14:46 | 3247144 jballz
jballz's picture

 

Holy fuck what are you doing here?

This is THE GAME. 

Morons watch basketball, buy jerseys and flip burgers or whatever gets them by.

 

We play with money. If you find this match between Ackman and Icahn anything but fucking awesome, you are in the wrong stadium. Go watch jigs throw balls at each other and leave us to our entertainment.

Fri, 02/15/2013 - 15:42 | 3247405 ElvisDog
ElvisDog's picture

I agree. It's a like a real-life version of "Wall Street" with Ackman as Gordon Gecko and Icahn as the other, richer guy.

Fri, 02/15/2013 - 18:59 | 3248047 beachdude
beachdude's picture

Had the same thought...

http://youtu.be/cBXF8dqA0Hw

Fri, 02/15/2013 - 13:38 | 3246923 ElvisDog
ElvisDog's picture

Exactly. Making more money is fun, but putting the screws to a competitor who called you out on national TV is more fun.

Fri, 02/15/2013 - 14:15 | 3247078 11b40
11b40's picture

That's right....it's hard to get 'stimulated' when you are 74 ( I would guess), but I bet this really gave Ichan a shot of adrenelin every time he picked up another block of options.

Now, he has a new goal - a new reason to get up and get going every morning.

 

Fri, 02/15/2013 - 13:28 | 3246887 N. B. Forrest
N. B. Forrest's picture

Double post

Fri, 02/15/2013 - 13:58 | 3247011 eatthebanksters
eatthebanksters's picture

Why does a dog lick his balls?...because he can!

Fri, 02/15/2013 - 22:00 | 3248482 Buck Johnson
Buck Johnson's picture

No you wouldn't and I think Icahan was ticked because Ackman was telling the truth. 

Fri, 02/15/2013 - 13:24 | 3246868 Canadian Dirtlump
Canadian Dirtlump's picture

I like your hair bro.

 

Either way, operation blowtorch the whippersnapper seems to be going along as planned. lmao.

Fri, 02/15/2013 - 13:45 | 3246950 slaughterer
slaughterer's picture

It is only Round 3: Bill will outwit Icahn in the end.  It will be a kind of gay patricide, but a patricide anyhow.  Do not underestimate the swarmy arrogance of the ACKMANATOR:  kind of like Edward Norris meets Superman.   But, yeah, sucks to be invested in Pershing right now.  (And ZH plays the Schadenfreude card so well once again.)

Fri, 02/15/2013 - 14:28 | 3247099 toys for tits
toys for tits's picture

It's been alleged by the Tyler(s) that Icahn is attacking Ackman on another front by attempting to send JCP into involuntary bankruptcy.  Ackman has about 18% of JCP.

Fri, 02/15/2013 - 13:15 | 3246814 PUD
PUD's picture

PSYCHOPATHS WITH LOTS OF MONEY...I HOPE THEY BOTH BLOW UP

Fri, 02/15/2013 - 13:16 | 3246815 philosophers bone
philosophers bone's picture

I don't know the facts about Herbalife but simply say this:  If regulators look at Herbalife and conclude that it either is not a "ponzi scheme" or that there is a reasonable argument that it is not a "ponzi scheme", Bill Ackman needs to be charged with market manipulation and go to jail.  You can't have people shorting the stock and then going public with dogmatic statements knowing that they will tank the stock.

In other words, the regulators need to look just as hard at Bill Ackman as they do Herbalife.

Again, I am not drawing any conclusions, just stating the ground rules.

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