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Carl Icahn: 'We're Going To Have Morons' Running American Companies
via CNBC
If you're going to close a conference, you should close it with Carl Icahn.
Scott Wapner is interviewing him at the Delivering Alpha conference, hosted by CNBC and Institutional Investor.
Wasting no time, Wapner asked Carl Icahn about the insider trading investigation involving him and golf star Phil Mickelson.
"I'm tired of my friends... asking me for free golf lessons," Icahn joked. "I tell you this, I never met the guy... These things happen I guess. I don't want to talk about this stuff."
Wapner let it go, and moved on to activist investing — its rise, and its critics like attorney Marty Lipton and BlackRock's Larry Fink.
"They can't say Icahn loses money for shareholders... anymore," said Icahn. "So now they're saying this... It may sound corny but I do love the country... not all the people but I do love the country... The problem we have is that the wrong guys are running these companies."
What does Icahn mean by "wrong guys?" If you've ever heard him you know. He means the frat boy types that have survived at companies by working political angles. Once they get to the top they want someone dumber than them below so they can maintain their status.
"We're going to have morons running these companies," said Icahn. "I'm having dinner with a lot of these guys afterwards... they're not bad guys."
But Icahn prides himself on his ability to find someone better to run the companies he gets involved in.
"The CEO's out there playing golf... tell him to talk to Phil Mickelson," he mused. "I used to joke, the only way to get these guys off the golf course is for me to file a 13D."
And boards — don't even get Icahn started about boards. Long meetings where most time is spent discussing the merits of Gulf Stream Jets.
Why should he be able to figure out a company's strategy when a board can't, Icahn reasoned.
Earlier at this conference, investor Nelson Peltz took the stage. A founder of his investment firm, Trian, is on the board of Family Dollar, a company that has become a target for Icahn. Icahn wants the company to sell itself to competitor Dollar General.
"I've said it publicly, the CEO shouldn't be the CEO," Icahn said. "Some people don't like it. It makes me sad..."
Wapner moved on to the concerns of the moment — quantitative easing and its impact on the stock market. Recently Icahn has said that he's nervous about the market's value.
And he knows who to blame for all this.
"Wall Street got us into this mess, lets not pull punches," said Icahn. "If I were Secretary of the Treasury these guys wouldn't be running these companies... We should be worrying about who runs our companies, not be printing money."
He said companies are borrowing cheaply but at a variable rate. That means it's easy for them to make a profit now, but what happens when the low interest rate party's over? No one knows, said Icahn. No one can know.
Now onto Herbalife — one of Icahn's most controversial positions that pit him against Bill Ackman.
Icahn said his firm bough 17 million shares of Herbalife, "and we haven't sold one share... That's all I can say, I think we should drop it."
That's when CNBC decided to be cute, and bring Bill Ackman on stage.
CNBC
Ackman says that Icahn helped him with his new deal — trying to get pharmaceutical company Allergan to accept a hostile bid by its competitor Valeant.
"I do respect Bill," said Icahn. "...It's almost crazy that we're at these loggerheads... I mean, what the hell are we fighting ourselves for."
This is like watching the end of a Tyler Perry movie. Both Ackman and Icahn are talking about the merits of activist investing.
"The point I would make is that he [Carl] needs the backing of... retail investors to be successful," said Ackman. "It's a strategy where I think there's very little downside because the major investors have to support the activist."
Carl continued: "Let me tell you a story... One of the members of the board I was friends with [at Stratosphere Casinos]... said we have a room... lets turn it into Copacabana... I brought in the CEO a tough, meat and potatoes guy. He's cutting the hell out of the course and making us money... My buddy on the board comes in with the plan... he puts the plan on the table smiling... I said to the CEO 'I promised I wouldn't micromanage, so what do you really. think?''
Icahn's CEO said — "dumbest f---ing idea ever."
And so they tore up the plans.
Icahn and Ackman are both pushing for Allergan to buy Valeant, so that's wherethe conversation went next.
"If I said a company was an accounting fraud," said Ackman making a not-so-subtle dig at short seller Jim Chanos, "the SEC would be all over me."
Chanos, of course, isn't the only one calling Valeant an accounting fraud and saying it lacks organic growth, Allergan's board has said the same thing and rejected Valeant's advances.
"Ultimately I think the transaction happens," said Ackman.
He continued that the best thing for Allergan's board to do would be to sit down and go over Valeant's numbers.
Here's last year's interview with Carl in case you missed it.
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