| This is an interesting comment, but Icahn's recent actions (last three to four years that I am familiar with) are driven by nothing more than the motive for short-term profit. The process proceeds along the following lines: 1. Acquire a stake of more than 5%, which requires a public filing with the SEC. This is very key as now the public has a verifiable way of knowing Icahn has a stake. 2. Write a letter to the board and/or management demanding changes to the structure of the company or use of its large cash pile(if applicable). This usually takes the form of a spin-off or buyback/dividend proposal. (Buybacks are more favorable these days due to tax considerations.) 3. The stock price increases at least 10% after it is announced Icahn has taken a stake. Icahn can sell here and take his profits home; 10% annualized is a very large gain. 3. Management predictably scoffs at Icahn's demands or arranges a show for shareholders in the form of a one-on-one meeting with the CEO or something along these lines. Nothing tangible happens. 4. Icahn sometimes is able to pressure firm management/board into buybacks or dividends, which only adds to Icahn's paper profits (see 3). This is usually done through the very real threat of going directly to the shareholders with a proxy to elect new board members. Even if this is unsuccessful Icahn still has achieved 3. This is known as the 'Icahn tax'. Due to name recognition and a strong track record Icahn is able to exert pressure on firms for a quick and easy buck. Nothing more. |