Carl Icahn is a business, entrepreneurial, investing, and philanthropy icon as well as the founder and majority shareholder of Icahn Enterprises. He owes much of his massive wealth to his various maneuvers as one of the corporate raiders who swaggered and reigned supreme over Wall Street in the 1980s (in fact, the character of Gordon Gecko in the impactful 1987 Oliver Stone movie Wall Street was allegedly based in large part on him). Controversial, polarizing, and responsible for several highly publicized missteps, Icahn has nonetheless crafted a career that helps keep him, even now in his 80s, as influential as ever.
A native of Brooklyn, Carl Icahn and his family didn’t have much, but that didn’t prevent young Carl from working hard enough through high school to go to Princeton. After earning a BA in philosophy in 1957, he then started medical school at NYU at the behest of his mother. Since medicine wasn’t really his passion, Icahn dropped out during his third year to venture down a different path.
In 1961, Carl Icahn joined Dreyfus & Co. on Wall St. as a broker. After several years of success, he borrowed money from an uncle he had given advice to and started Icahn & Co., a securities firm specializing in arbitrage and options trading, and secured a seat on the New York Stock Exchange.
Several years later, in the latter part of the 1970s, Icahn began making waves when he started buying shares of the family-owned appliance company Tappan until he was the majority shareholder, at which point he led a proxy fight. After a period of wrangling, Tappan was sold to Swedish appliance manufacturer Electrolux. The sale made a lot of money for Icahn and other investors when the stock doubled not long after.
Real-life Gordon Gecko
The 1980s were when Carl Icahn entered America’s consciousness. He made several fortunes for himself, his partners, and everyday investors who followed his moves and advice. He was notorious for his frequent tactic of greenmailing to make his fortune: he would threaten to take over a major corporation by buying up stock until he accrued enough controlling interest that either the company was forced to acquiesce to his demands for change to its corporate structure or strategy or he was bought out by the targeted company, allowing him to exit with massive profits. His interactions with Marshall Field and Phillips Petroleum were two major profitable successes in this manner.
Icahn didn’t always walk away, though. In 1984, he acquired American Car & Foundry Company, but instead of selling, he tried to turn the company around: he fired a few employees, slashed costs in other areas, and sold assets. After three years, he was able to unload it for a huge profit. In the 1990s, he continued his ways, including a famous bid to take over RJR Nabisco. Although Philip Morris eventually won the takeover fight, Icahn didn’t saunter away empty-handed – he made more than $600M on it.
Not everything Icahn has touched turned to gold. After buying up Trans World Airlines in 1985, he took it private and sunk a lot of his own money into the company to make it viable, but it eventually collapsed. When TWA filed bankruptcy in 1992, Icahn was forced to resign. Another high-profile case happened in the 2000s, when he tried to break up Time Warner after launching a hedge fund in 2004, but it didn’t work out well for Icahn. He also stumbled in his effort to take control of Blockbuster; even he couldn’t prevent the company’s collapse when the video-rental market became extinct.
Still Impactful after All This Time
Although Carl Icahn turned 80 in 2016, he’s still in the game and he still likes winning. In recent years, he’s stayed in the headlines. He has acquired significant amounts of stock in Netflix, he influences investor opinions, and he actively engages with current giants eBay and Apple. With eBay, is supposedly influenced the company’s decision to spin off PayPal; with Apple, he purportedly influenced its 2015 program that increased stock buyback.
In all, Icahn has or has had substantial or majority holdings in many recognizable companies: CVR Energy, Tropicana Entertainment, Motorola, Western Union, Marvel Comics, XO Communications, and more. Addition, he is chairman of manufacturing company Federal-Mogul.
Despite his notorious reputation as a ruthless investor and negotiator, he is also known for his philanthropy. He has donated millions to education and medicine, funded homeless shelters in NYC, given charitably to Princeton, and contributed to Donald Trump’s 2016 Presidential campaign.
Whatever your opinion of Icahn’s brashness and tactics, his influence on Wall St. and the investing public is undeniable – and there’s no sign of its diminishing anytime soon.