Posted on March 15 2010.
Tags: beneficial owner, blockbuster bbi, blockbuster inc, board directors, business today, carl icahn, Derek Hoffman, Earnings, Economy, genz, genzyme, Homebuilder, Investing, Markets, mobile business, NYSE, opportune time, s board, securities and exchange commission, sifting, stake, stock holders, stock price, wci communities, wci communities inc
On February 22nd, Genzyme (GENZ) said Carl Icahn will nominate 4 directors, including himself, to Genzyme’s board of directors. The election is slated to take place at the annual meeting on May 20th.
The Genzyme news is an opportune time to take notice of some of Icahn’s recent botched investments. We uncovered a lot of shareholders dumped in the mud while trying to piggy-back Icahn’s investments. Here are six Icahn flops that I could find for you after a round of stock sifting:
1) WCI Communities (former ticker: WCI)On January 16, 2007, a Securities and Exchange Commission filing disclosed that Icahn was the beneficial owner of 14.57%, or 6.1 million shares, of WCI Communities Inc. In the filing, Icahn indicated he intended to contact WCI to discuss how to “unlock the inherent value” of its shares. Icahn served as chairman for the homebuilder. Icahn paid an average $18.46 a share — about $112.6 million — for his stake in WCI. Icahn’s shares of WCI stock are worthless today since WCI filed for bankruptcy and no longer trades on the NYSE under the ticker WCI.
2) Motorola (MOT)On January 30, 2007, Motorola (NYSE: MOT) received notice that Icahn owned about 33.5 million shares — at the time representing a 1.39% interest in the company. Again, Icahn pushed for a seat on the board. The stock price was around $19 per share. But he was turned down by the majority of the stock holders in an election for Board of Directors. On March 24, 2008, Icahn sued Motorola as part of his efforts to gain 4 seats on Motorola’s Board and force a sale of its mobile business. Today, shares of MOT are fetching $7 per share.
3) Blockbuster Inc (BBI): “Wow! What a difference (Icahn makes)!In 2005, Carl Icahn began his investment stake in Blockbuster (BBI) and securing representation on the company’s board. Icahn spent roughly $320 million on his stake at a time when BBI was over $10 per share. Icahn has been snowboarding downhill with BBI’s shares ever since he became an “activist” investor in the company. Today, Blockbuster shares are trading at $.41 per share. I guess his activism has been to destroy value.
4) Time Warner (TWX)In 2006, Carl Icahn controlled 3% of the Time Warner (TWX) and waged a quixotic campaign to split the company into 4 separate units. But he didn’t get anywhere close. Instead, he only convinced management to increase share repurchases — even that was a horrible move. Shares were trading at about 45 when that was announced. Today, TWX shares trade at $30.50 per share.
4) Telik (TELK)In early 2007, Carl Icahn owned over 5 million shares in biotech company, Telik (TELK). He purchased shares between $7 and $17 per share. By early 2009, Icahn sold his stake in Telik for under $1 per share.
5) Greenbrier Companies (GBX)In early 2008, Carl Icahn acquired an approximate 10% stake in railroad freight car company Greenbrier Companies (GBX). At the time of Icahn’s share acquisition, shares of GBX were over $20. Icahn had the vision to hopefully merge GBX with another one of his heavily owned companies, American Railcar (ARII). However, his vision remained nothing but a vision. His vision flopped, and today Greenbrier is trading at appoximately $10 per share.
6) Guaranty Financial (former ticker: GFG)In January 2008, Carl Icahn owned roughly 10% of the Texas-based financing group. The stock was trading over $12 per share. Icahn pressured its former parent, Temple-Inland (TIN), to spin off the financial group. The bullied action resulted in Guaranty finally declaring bankruptcy in the summer of 2009.
Relative SuccessTwo deals exhibiting Icahn’s corporate raider success include Eli Lilly’s (LLY) acquisition of ImClone and Anadarko’s (APC) acquisition of Kerr-McGee.
As you can see and conclude, the road bumps in Icahn’s track record are not so friendly to the Billionaire’s fellow shareholders. Would you rather invest with Warren Buffett or Carl Icahn? I would opt for the more shareholder friendly of the two and steer clear of Genzyme (GENZ) right now. Another disaster might be brewing with Icahn.
Disclosure: No positions in the companies mentioned.
To get entry points, stop-loss points, and profit targets for our fresh March watch list stocks and Featured Trade, simply try a 14-day complimentary trial to Wall St. Cheat Sheet Premium by visiting here: http://wallstcheatsheet.com/newsletter/ Readers who liked this also enjoyed these posts:The Top 10 Reasons CBS is Back for March Madness3 Pioneers in the Movie Rental BusinessTax Season: Which Companies Will Win? 81116 Responseshttp://wallstcheatsheet.com/trading-markets/carl-icahns-6-biggest-busts-is-genzyme-next/?p=8111/Carl+Icahn%27s+6+Biggest+Busts+...+Is+Genzyme+Next%3F2010-03-15+13%3A20%3A31Derek+Hoffman to “Carl Icahn’s 6 Biggest Busts … Is Genzyme Next?” Doug says: March 15, 2010 at 3:50 pmWhat Nonsense. Every investor including Buffet has had the fair share of failures but so what. Look at Icahns bank account then look at yours. I'm sure he's not to concerned with your opinions.
Reply DamienHoffman says: March 15, 2010 at 4:14 pmNo one said he was concerned with our opinions. The point is he is held out as an amazing investor, and his track record has blown. This isn't nonsense, it's fact. It's all public record. Maybe you have it memorized, but most people don't and we think it's a very interesting insight.
Of course my account is not as large as his. Why would that matter? What journalist should meet that criteria to point out that a big time investor has been on a major cold streak? In fact, if we take your logic, then all journalists should stop reporting because they would never be as "experienced" as those they cover. But almost everyone understands that's not the point of journalism.
Reply iorek says: March 15, 2010 at 5:05 pmI'm not sure "looking at Icahn's bank account" is the proper measure of anything unless you are Icahn. Look at the fate of the shareholders who get caught up in his missions. There's an awful lot of broken crockery in the statistics displayed above.
Buffet has shown, in word and deed over many decades, that he creates value for the shareholders that team with him. Icahn has shown that he is a volatile
Tags: beneficial owner, blockbuster bbi, blockbuster inc, board directors, business today, carl icahn, Derek Hoffman, Earnings, Economy, genz, genzyme, Homebuilder, Investing, Markets, mobile business, NYSE, opportune time, s board, securities and exchange commission, sifting, stake, stock holders, stock price, wci communities, wci communities inc
On February 22nd, Genzyme (GENZ) said Carl Icahn will nominate 4 directors, including himself, to Genzyme’s board of directors. The election is slated to take place at the annual meeting on May 20th.
The Genzyme news is an opportune time to take notice of some of Icahn’s recent botched investments. We uncovered a lot of shareholders dumped in the mud while trying to piggy-back Icahn’s investments. Here are six Icahn flops that I could find for you after a round of stock sifting:
On January 16, 2007, a Securities and Exchange Commission filing disclosed that Icahn was the beneficial owner of 14.57%, or 6.1 million shares, of WCI Communities Inc. In the filing, Icahn indicated he intended to contact WCI to discuss how to “unlock the inherent value” of its shares. Icahn served as chairman for the homebuilder. Icahn paid an average $18.46 a share — about $112.6 million — for his stake in WCI. Icahn’s shares of WCI stock are worthless today since WCI filed for bankruptcy and no longer trades on the NYSE under the ticker WCI.
On January 30, 2007, Motorola (NYSE: MOT) received notice that Icahn owned about 33.5 million shares — at the time representing a 1.39% interest in the company. Again, Icahn pushed for a seat on the board. The stock price was around $19 per share. But he was turned down by the majority of the stock holders in an election for Board of Directors. On March 24, 2008, Icahn sued Motorola as part of his efforts to gain 4 seats on Motorola’s Board and force a sale of its mobile business. Today, shares of MOT are fetching $7 per share.
In 2005, Carl Icahn began his investment stake in Blockbuster (BBI) and securing representation on the company’s board. Icahn spent roughly $320 million on his stake at a time when BBI was over $10 per share. Icahn has been snowboarding downhill with BBI’s shares ever since he became an “activist” investor in the company. Today, Blockbuster shares are trading at $.41 per share. I guess his activism has been to destroy value.
In 2006, Carl Icahn controlled 3% of the Time Warner (TWX) and waged a quixotic campaign to split the company into 4 separate units. But he didn’t get anywhere close. Instead, he only convinced management to increase share repurchases — even that was a horrible move. Shares were trading at about 45 when that was announced. Today, TWX shares trade at $30.50 per share.
In early 2007, Carl Icahn owned over 5 million shares in biotech company, Telik (TELK). He purchased shares between $7 and $17 per share. By early 2009, Icahn sold his stake in Telik for under $1 per share.
In early 2008, Carl Icahn acquired an approximate 10% stake in railroad freight car company Greenbrier Companies (GBX). At the time of Icahn’s share acquisition, shares of GBX were over $20. Icahn had the vision to hopefully merge GBX with another one of his heavily owned companies, American Railcar (ARII). However, his vision remained nothing but a vision. His vision flopped, and today Greenbrier is trading at appoximately $10 per share.
In January 2008, Carl Icahn owned roughly 10% of the Texas-based financing group. The stock was trading over $12 per share. Icahn pressured its former parent, Temple-Inland (TIN), to spin off the financial group. The bullied action resulted in Guaranty finally declaring bankruptcy in the summer of 2009.
Two deals exhibiting Icahn’s corporate raider success include Eli Lilly’s (LLY) acquisition of ImClone and Anadarko’s (APC) acquisition of Kerr-McGee.
As you can see and conclude, the road bumps in Icahn’s track record are not so friendly to the Billionaire’s fellow shareholders. Would you rather invest with Warren Buffett or Carl Icahn? I would opt for the more shareholder friendly of the two and steer clear of Genzyme (GENZ) right now. Another disaster might be brewing with Icahn.
Disclosure: No positions in the companies mentioned.
What Nonsense. Every investor including Buffet has had the fair share of failures but so what. Look at Icahns bank account then look at yours. I'm sure he's not to concerned with your opinions.
No one said he was concerned with our opinions. The point is he is held out as an amazing investor, and his track record has blown. This isn't nonsense, it's fact. It's all public record. Maybe you have it memorized, but most people don't and we think it's a very interesting insight.
Of course my account is not as large as his. Why would that matter? What journalist should meet that criteria to point out that a big time investor has been on a major cold streak? In fact, if we take your logic, then all journalists should stop reporting because they would never be as "experienced" as those they cover. But almost everyone understands that's not the point of journalism.
I'm not sure "looking at Icahn's bank account" is the proper measure of anything unless you are Icahn. Look at the fate of the shareholders who get caught up in his missions. There's an awful lot of broken crockery in the statistics displayed above.
Buffet has shown, in word and deed over many decades, that he creates value for the shareholders that team with him. Icahn has shown that he is a volatile megalomaniac who will not hesitate to knife the companies that he toys with, or their shareholders.
"Icahn has shown that he is a volatile megalomaniac who will not hesitate to knife the companies that he toys with, or their shareholders."
Exactly. That's the point of this post. Thanks for explaining to those who are in love with Carl.
Wow! Great detective work on Icahn. I'm glad there's people out there like you that act as a watch dog for us as the SEC seems to have completely fallen off this role as of late.
Thanks, Lance!
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