Icahn: The Restless Billionaire (2022) - full transcript

He started from nothing
and built a fortune

worth upwards of $20 billion.

It is not often
that a Wall Street titan

shows up on the cover of "Time" magazine.

The most feared
corporate raider in the world.

One of the shrewdest
investors on the planet.

He moves markets

by the mere mention of his name.

"Fortune" magazine says

he may be making
more money for shareholders

than anyone else on the planet.



He's tenacious.

- Enigma.
- The smartest guy I've ever met.

He's the great white shark

in the sea of capitalism.

My mother said I have some
kind of warrior gene in me or something.

A warrior gene?

Marvel Comics, Time Warner,
Texaco, US Steel,

Dell Computers, Apple, PayPal, Caesars.

Motorola. Yahoo... all have felt

the pointed sting of Carl Icahn.

I do it because in a free enterprise
system, I do it for profit,

but what I do should be done.

- Totally terrifying.
- Bully.

Great guy, but he's about
as smooth as a stucco bathtub.



I own it, it's my money.

If I lose, I'm answerable
to my bank account.

I'm 85, you say, this guy's 85.
Pretty good, right?

I can get some real heat on 'em.

I don't like to start wars,

but if somebody wants to start it with me,

there's something in me that likes that

'cause I'm really looking
forward to going at 'em.

Wall Street, they look
at Carl Icahn and they say

legend, they say genius.

There's an admiration

for what he's been able to accomplish

and the wealth that he's created.

The public, I think,
has a much more mixed view

about the impact he's had on companies,

on labor, on society.

Then the question is

whether he is a activist investor,

an advocate for the shareholder,

representing the little guy,

or corporate raider who goes in,

extracts value out of that company

to the detriment of the long-term company

but to the immediate benefit
of Carl Icahn.

Let me do it.
No, I wouldn't say it that way.

It's sort of a colorful term,
"corporate raider,"

but it's far from the truth.

Absolutely is ridiculous
related to what we do.

It's the opposite of what we do.

We bring things to the party.

We don't raid 'em and take 'em out.

That's why I think eventually
it was changed to "activist."

But activist or raider,

I haven't changed what I do one iota.

Call me whatever you want.

So, how are my boys?

What good boys.

He gets up about nine o'clock

and he's already,
he's eating his breakfast

and reading the newspaper
while he's talking,

and, you know, writing notes and all that.

He immediately starts his day,

catches up with what the news is,
how the market's doing.

Uber's got one thing after another.

We work together in his home office,

and then, about four o'clock
in the afternoon,

he starts heading over
to his "office office"

on Fifth Avenue,

for meetings, or what
current crisis is going on.

Crisis manager. I'm like Ray Donovan.

I try to... I try to...
I try to get it done

and then I go into another crisis.

There's always a few of 'em.

You don't have to manufacture 'em.

I think the way
Carl looks at business

and the way he does things
is he tries to identify companies

that he thinks are undervalued,

and he'll secretly build a position

until it gets large enough that
he has to reveal the size.

And he'll try and put pressure
on the CEO to do what he wants,

whether that's doing a merger
or a share buyback.

And in more cases than not,
over the years,

the CEO will end up doing
something that he wants

and the stock price will go up
and Carl will make a lot of money.

Meissonier's, it's "Napoleon
at the Battle of Friedland."

Before hubris took over

and took it all away from him.

He was one of... Well, he was
a great strategist, no question.

But then he lost it all
because of his arrogance.

And that's one thing you have to remember.

It doesn't stay forever
if you're not careful.

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Carl Icahn, I guess,
doing what Carl Icahn does,

and he is on the attack.

Carl, what do you
object to most strongly?

I object to the fact

that they did a acquisition

that puts the company at risk

and didn't go to the board
members for a vote.

Somebody
from Reuters just called.

- What did they say?
- They want to understand what we're doing.

You know, we want to remove
some of the directors and put us in.

They know I'm not going away, so we just,

we just keep, we keep going.

The idea of an activist investor

is they buy a stake in a company

with the plan and ambition

to go to the company's
management and board and say,

"You're doing it wrong.
Here's how to do it."

Yeah, how you doing?

I don't have to tell you
anything you don't know.

I mean, I think it was
reprehensible what went on.

I think they got no right to do that
without talking to the shareholders.

You know, they're betting the company,
it's not their money.

He looks at boards and he looks at CEOs

as country club boards.

They spend no time thinking
about the company.

They're collecting their fee
and they're playing golf all day.

The board of directors
of a company

are supposed to represent

the interests of the shareholders.

They are supposed to hold

the CEO and management to account.

That is their job.

Whether they do it is
Carl Icahn's biggest question.

Hey, who the hell put this out?

Who got this out, that we're
replacing four directors?

- Yeah.
- We just told them that.

You told them 'cause I told you.
We filed it, and so...

Yes, we filed.
This is what he just filed.

That's just what we was talking,
and they already put this out.

Hey, we said a lot worse than this.
We didn't say anything bad.

We said a lot worse a month ago.

Here it is, it just
happened while you were here.

It was a very... you guys were here

at the making of
a lot of history today, guys.

It's not a sure thing that
when you take a big decision

and tell a CEO what to do,
they're going to listen.

It's also not a sure thing
that your advice is the right thing to do.

You need chutzpah.

You're taking on big-deal CEOs.

You're taking on their lawyers.

It's a very high-stakes game.

You can make billions,
but you can also lose it.

That is stressful.

- Hey, Gail,
- Yes?

Come in here for a minute.

I'm his consigliere.

At night time, we join up
and then go home together.

What do you think drives him?

It isn't money, strangely enough.

You would think it would be money.

I mean, it's nice that he can do it,
but it's not money.

He just becomes obsessed on something

and he just keeps like a bulldog,

he just keeps going and going
until he gets what he wants.

So... that's what drives him.

I told him it's winning,
I think, competitive, just winning.

Coming up with a new idea
to beat the competitors.

You know, we're gonna be able to be

the biggest and the best.

That gets me excited.

The money is just sort of a goal.

It's like, the explorers,
why do they keep doing it?

They believed in going
for the gold, like Cort?s and these guys.

But I think the actual finding and doing

is much more exciting than having it.

And I think that's why you find

a lot of rich people get very neurotic.

'Cause they're disappointed
when they have it.

It's not what it's drummed up to be.

He's been successful,
say Wall Streeters,

because he's intimidating and relentless.

He was an only child growing up during
the Depression

in Far Rockaway, Queens, New York.

And even as a kid, his mother
said he was like Genghis Khan.

He loves a good fight, no doubt about it.

Tappan. Tappan.

The name is Tappan. Tappan... Tappan...

So in the late '70s,
Carl turned his attention

to a company called Tappan.

Tappan made ranges,

and it was a good brand-name range.

Showcase number 2.

A new kitchen!

An electric range from the famous Tappan.

Quality appliances since 1881.

Tappan has its first loss
in nearly half a century.

Because of the loss, and loss
of faith in the company,

the stock plummeted

to I think about seven or eight bucks.

So Carl does his calculations,

assesses the valuation of the company

between the stock price

and the ultimate value of the company.

And there's a gap of about $15
that Carl feels is there.

Well, we believed the
company was very undervalued.

And Tappan fit the program for me

where I was embarking on activism,

where I thought it was
a great company, a great name,

that could be a takeover candidate

being blocked by, you know, the CEO

and a board.

The CEO was a very strong personality,

but I don't think he knew
much about the business.

And Dick Tappan was
the founder's grandson.

I think he was intimidated
by this guy Blasius.

And I thought there was
a chance here to break through.

So we went and bought
a lot of stock in it.

And... we would then
make a little noise.

"I'm writing this letter
to ask you to elect me

to the board of directors."

"During the past five years,

"Tappan, under its current management,

has lost $3.3 million."

The company is owned by the shareholders

and these managements felt like,

"We don't wanna deal
with these shareholders."

"They thought they'd get
under our skin? No."

We ran a proxy fight
and they fought us like hell.

It's just amazing.
Carl got a seat on the board.

I think we were the wave.

There was not anybody really
doing what we were doing.

When Carl goes to Ohio

to visit with Tappan management,

it's an orderly life there,

and everything is in the right place.

The CEO called me up.

He said, "I wanna have dinner
with you before the meeting."

So I thought he'd want to have
a sort of nice chat with me.

And he looked at me and he was
sort of fierce-looking.

He said, "Look, at my board meeting,
you're an interloper.

"I don't want you to say
anything at the meetings.

I don't want you to disturb the rest of
the board and we can get along better."

And I was just beginning this stuff.

Today, I would have
told him to go to hell.

The next day, Carl came

and we went into the meeting,

which was pretty contentious.

And the CEO decided
to buy another company.

And he brought it to the board.

He was gonna make
the company less valuable

in a strange way but him more powerful.

And the CEO is showing everybody with his
books and his investment bankers

why this was a great acquisition.

The CEO, he said, "Look, I've
done a lot of work on this.

I just want a vote that agrees with me."

And this one guy on the board
who never really spoke either

but who owned a lot of stock,
he said, "Just a minute."

He says, "I'm looking at this.

I just don't understand
why we're buying it with these numbers."

The CEO, he says, "Are you
questioning my judgment?"

He's glaring at the guy.

He says, "Sit down and vote
with all of us."

He really was an imperious guy.

And I'm watching to see what to do.

And, you know, at that time,
I didn't think anybody would support me

if I said anything, but I said, "The hell
with this guy Blasius."

By that time, I didn't give
a damn if he liked me, didn't like me.

So I go, "Screw this guy."

In this Tappan time,
one could think

that Carl didn't have the...

kahunas that he would have
later in big deals.

He had more then.

He had to do it with nothing.

He didn't have billions in the bank.

I said, "You know something, guys,
I'll tell you what I think."

"This is probably one of the worst deals

"in, I'll say, economic history.

"It's insane. We're buying this company
at ten times what it's worth,

only," I say, "to save Don Blasius' job.

That's why we're doing it."
I really let him have it.

And the guy was going nuts.
He was turning red in the face.

He says, "What are you saying? Are you
questioning my ability?" I said "Yes I am.

I don't think you're a good
CEO, you're just gonna kill this company."

All of the sudden, Carl, he's not talking,

he's yelling, he's demanding.

"I, for one, will do everything
I can to stop this deal,

"and now I'm saying it to this board,

so now let's have the vote."

And Blasius is looking at me,
red in the face and all.

And he says, "We'll put off
the vote till the next meeting."

And then he just glowered at me,
and I just looked at him,

and that was it.

People are scratching
their heads saying, how the...

"What the hell just happened?
Who is this guy?"

"How did he foil the plans of
the CEO of a public company?"

And then, only seven or eight
months later,

Electrolux agreed to buy Tappan

for a little over $18 a share...

...proving in absolute terms,

Carl was right from the beginning.

Tappan was worth a lot more than the $7
the stock was trading at

before Carl got involved.

And all the shareholders got richer.

At the end,

Dick Tappan comes over to me

and he says, "Carl, Carl,
I wanna ask you a question.

Would you manage my money?"

And he wanted me to manage money for him.

And I did for a little bit.

This is Carl, Carl Icahn on.

If I could interrupt for a minute.

The CEO was just nefarious.

He, his job in his mind was
to make himself a lot of money

at the expense of shareholders,
he didn't care.

And at the expense of
the company enriched himself.

The idea that some management teams

were kind of not being very smart

and taking advantage of
their position as managers

to the detriment of the shareholders,

you know, he got that
in his head early on,

when the rest of the world
wasn't quite sure, you know,

was this greenmail, what, what was this?

This is one of... the most
reprehensible thing

I think I've ever seen...

But to some degree
he's been vindicated that,

yes, management often needs
to be shaken up.

He's helped stockholders an awful lot,

including plumbers and teachers
whose pension funds

fund their retirement.

So this is not just hoity-toity
big-time investors.

The downside of that
is to say, yeah, but what about

all the people who lost jobs because of
what Carl did at all these companies?

Carl and guys like him, I think
the core criticism would be that

they're not out to make
these companies better,

they're out to make a lot of money.

Part of my values is to make money and I
can't change my values.

A great painter loves to paint.

What do you do, criticize him
because he likes to paint?

But what makes me fulfilled about it is

that I also believe I'm making
money by doing the right thing.

We've been having
a debate, it's an open debate,

'cause I've done it in the columns,

about his role as a vulture

or a shareholder advocate,
and which is it?

And on certain days,
I've come out on the side

of shareholder advocate,
and he, you know, loves it.

And on certain days,
I have called him a vulture,

and he'll call up screaming.

What I like about Carl
is he's game for the debate,

he wants that debate.

Companies are
the backbone of our society,

and many are terribly managed
and there's no accountability.

When you can change that,

you will have some collateral damage,

there's no question,
it's creative destruction.

But we bring in the innovation,

so we have companies
that are more productive,

create more jobs, in a macro picture.

At the end of the day,

Carl wants to make as much
money as possible,

despite what he may come out
and say publicly

or write in one of his letters.

I mean, that's the criticism you hear.

So everybody says,
"Well, that's great,

Carl Icahn made money for himself."

But the real proof of
the pudding is in the eating.

If you had invested
in Icahn Enterprises in 2000,

when we really started
getting into the activism,

the value of your investment has increased

1,931%.

During that same period,
your investment in the S&P

went up only 324%.

We have made for shareholders,

forgetting us,

literally a trillion dollars

for all investors.

I think I proved it
by making all this money.

This system should be changed

and that we should have true
corporate democracy

and accountability.

Frankly, I made this money
because the system is so bad,

not 'cause I'm a genius.

This is New York.

A miracle city.

A monument to our nation's
restless energy.

Across the river from Manhattan

lies the borough of Queens.

I grew up in the streets of Queens.

It was sort of divided.

In public school, you had
some of these middle-class,

mostly Jewish kids.

From the other side of the tracks,

a lot of the reform school kids,

and those were the kids I liked, really.

Used to play basketball
with the Gotti brothers.

But the more my mother said,
"Don't do it," the more I wanted to do it.

Bella Icahn
was the school teacher

who was always teaching school.

Carl's father was a cantor,

the guy who sings in a synagogue,

who pressed Carl

on philosophers and philosophies
and was unrelenting,

and his mother, who was
unrelenting another way.

She wanted him to go to medical school,

but they were both very intense people.

He had a tough childhood.

I mean, you know, his parents
would brag about him in public

but kind of berate him, privately.

I was never really happy
in that whole environment.

So I really wanted to get out of there.

I was real smart in school,
and I had good marks.

I took the college boards,

and I think I did the best
in Queens or something on 'em.

And my father did say to me,

"If you get into Yale,
Harvard or Princeton,

we'll pay the tuition."

'Cause they figured nobody ever got in

from Far Rockaway High School.

And so I got into all of 'em.

And everybody was really surprised,
including my parents.

I wanted Princeton.

But then when it came
to thinking about paying the tuition,

it was only $750 in those days,
and the room and board was $750.

My father said, "Son, we're
not gonna go back on our word.

We're gonna pay your tuition."

I said, "Thanks, Dad, that's great.

I appreciate it greatly."

And then it hit me, I said,

"What about room and board, Dad?"

And then he said, "You're a smart kid.

You gotta worry about
the room and board yourself."

So, somehow I wheedled myself a job

on Atlantic Beach,

the sort of, in quotes,
"wealthy people" came.

So I'm a cabana boy,
figure I'll work for tips.

And you could make close to $100 a week.

And these salesmen,
for the most part from Brooklyn,

were playing poker.

And once they said,
"Kid, how much you make?"

I said, "Hey, I made a hundred bucks."

"Okay, you got a hundred bucks,
you wanna lose it,

come here, do a game, we'll
show you what life's about."

So I said, "Yeah, I think I could play."

And they wiped me out
in about a half an hour.

I lost the $100.

I said, "Hey, I'm smarter
than these guys."

So during the week, I went out,
I got three books on poker.

And it's really a mathematical game.

It's luck, too, but
these guys were not that good.

To begin with, they were drinking vodka,

and they were just having fun.

The next week,

I went in and I said,
"I'll play it again."

They said, "Okay, kid, you haven't learned
your lesson yet."

And then I killed 'em.

I got inordinately lucky.

And literally that weekend, I won $800.

And that's how I paid my room and board

throughout Princeton.

I can tell you the first moment
I fell in love with Carl,

and that was when I
started working for him

and heard him on the phone
speaking to his uncle,

who had offended him in some way.

And he was so frank in that exchange.

Coming from an Irish background

where everything is sort of hidden,

I was not accustomed to

that kind of depth of feeling
and that honesty of feeling,

and I think that was
the first moment that I thought,

"This guy has a little bit more substance
than I thought he did," so...

God, this elbow's killing me.

Well, you played pretty well
with the elbow killing you.

Well, imagine the trouble
you're going to be in.

Yeah, imagine if you
didn't have a bad elbow.

You know, you hit those goddamn
little poopy shots at me,

which, you know, it throws me off my game.

You know, that's, you know,
in some cases that's by design.

I know you don't think that,
but it's by design.

- Sometimes I just...
- Baloney, it's by design.

There are times I play with you when
I deliberately hit it soft.

You're not good enough
to deliberately hit it soft.

You don't have a slice. You don't, yeah.

I don't have to have a slice.

Yeah, I mean, you played well,
you played well.

You actually, you actually
really did okay yesterday,

got to admit, with a bad elbow.

We started living together in '92,

and didn't get married until '99.

This is another horror story

from a client from TWA.

But I have known him since '78.

I started working for him in '78.

The first time I met Carl,
this employment agency said,

"Can you please come in?" and she said,

"I have this guy, I've had a hard time
keeping people with him."

That's not true.

I've had people with me 20 years.

I'm not gonna lie on camera,
so you can just go ahead

and say what you wanna say.

But anyways, the pile of stuff
on his desk was incredible.

So he says, "Do you think
you could help me with this?"

This chaos, and in the first
two weeks, I was ready to quit.

But he was fun.

He was just very fun.

And so, you know, it started there.

And it was, it was good.

You're gettin' too good...

I think what keeps it going
is respect for each other.

And we laugh a lot.

I mean, there's a lot of banter,
you know, sarcasm, back and forth.

- Doesn't matter what you think.
- It doesn't matter what you think.

- Who cares what you think?
- Who cares what you think?

We can banter with each other,

but she's one of the few people
whose opinion I really value.

Some nights I fall asleep in the bath.

And Gail turns a movie on

and doesn't bother to tell me she leaves.

And I wake up and say, "Holy, where am I?"

I say, "Gail, maybe you could
have waked me up, check in.

I could have been dead in there."

- Seriously.
- What?

I could be on fire sitting next to him

and he wouldn't spit on me.

What is this nonsense?

She wouldn't know if she left me
in the bathtub drowning.

It's a nice way to spend a life.

You should stop.

Because you have to answer
the phone because...

- Well, somebody's gotta answer it.
- ...I just can't.

- It might be important.
- Let somebody else answer the phone.

What if it was for me?

Now I lost it.

So, Carl goes to Princeton
and he's kind of an outsider.

We started
at Princeton in 1953,

but there was clearly a social
pecking order at Princeton.

The nature of the social situation was

that Jews didn't even apply
to certain clubs.

I never resented it.

But I think, in many ways, Carl did.

That's the thing about Carl,

is he has kept that feeling
of being an outsider,

because I think that,
at seminal moments in his life,

he very much was an outsider.

And I think Carl felt

a desire to prove to himself and to others

that he's smarter
than most of these people.

He majored in philosophy.

And the best way Carl could exercise

his lifelong need to show superiority

to the Brahmin culture

that dominated Princeton in those days

was to win the senior thesis,

which is the equivalent
of being valedictorian.

The thing I enjoy
by far the most,

and maybe in my life,
that I'm the proudest of,

was my thesis.

And I just wanted to prove

that I could accomplish something.

It's almost unreadable,
it's so complex.

But he got his revenge,

and he won that senior thesis.

I'm telling you,
this is very arcane stuff.

I won an award for it,
but when I read it again,

I honestly can't understand what I wrote.

It was just an exercise,

I won't say in futility,
but an exercise in logic,

which is... really fulfilling,

but it wasn't for me.

I got accepted to medical school,

and I really didn't wanna go.

I didn't wanna be a doctor,
but my mother was so adamant.

She said, "It's an anti-Semitic world,

therefore be a doctor."

And then she used to scare me and say,

"If you don't, you get out of Princeton,

they're gonna take you in the army
and they're gonna kill ya."

So I quit a couple of times.

My mother always
talked me into going back.

And one time we go
into this tuberculosis ward,

and I'm a slight hypochondriac,
but not terrible.

This resident picks me
from the back, he says,

"Icahn, give me a differential diagnosis."

I tried to be funny,
so I look at him and say, "Hey, Doctor,

we know what he got, it says
'tuberculosis' up there."

He says, "Don't be funny,
this is medicine."

So I lean over the guy
and I tap his chest.

Coughs all over me,
I say, "Bullshit, that's it."

"I quit."

He says, "You don't leave here.

You leave here, you're never coming back."

I said, "It's okay with me
if I never come back.

You talk to my mother."

So I remember to this day,
I walked from 34th Street

all the way up 42nd Street,
where you could join the army.

The army, to Carl, was
the witness protection program.

And he would tell me this,
"My mom couldn't get me."

There were two choices: jail or the army.

I never liked
the discipline of anything.

I hated the army.

But I made money in the army,
I played poker in it, but I hated it.

So I left the army
with maybe 20, 25 grand.

By his poker playing,
you start to see his ability

with numbers and strategy.

And he started thinking about
finance in a serious way.

So we're finally, we're going
to be doing the test run

- of the podcast today.
- Good idea.

My roots come from more, storytelling,

and so I started doing different projects

for my father,
like PR and his social media.

What I wanna do in this podcast is

- call it "Outrage," you know...
- Yeah.

...and call it "Outrage of the Week,"

AKA "How shareholders
are getting screwed."

And just tell it as it is.

And then we'll see how it
works, but we'll play with it.

All right, so this is what we're gonna do,
we're gonna put our headphones on.

You're gonna take them,
you just open them up.

You talk to me like I'm a moron.

- Okay.
- I know.

Michelle, I'll show you how to do it.

As a child,

I didn't know how monumental
the deals were

that my dad was involved in.

I just knew he was really, really busy.

But PayPal is an exciting company,

but it should have been spun off, but the
board didn't wanna lose it.

After we were fighting
to spin it off for three years,

and the CEO suddenly had an epiphany.

"Wow, great idea I just had.
Let's spin off PayPal."

And the stock went way up.

He works all the time.

I think that was, that's his mission.

What's surprising is

that I think Bernie Sanders

and even Elizabeth Warren have a point.

And I don't like them, I mean,
because I don't like socialism.

I don't think it could work,
but what they are saying,

this wealth gap,
the tremendous wealth gap,

- should not exist.
- Yeah.

People on Wall Street
are tremendously overpaid.

The investment bankers make
ridiculous incomes,

relative to what they contribute.

You know, I think my father
is an activist.

I think by nature he wants
to create change.

When I came into Wall Street,

I realized playing the market
is extremely risky,

extremely dangerous, so...

He talks a lot about
the market in 1962.

You know, for him that was...

I think that was one
of the most impactful moments.

When I got out
of the army, basically,

I went to Wall Street
because I was into stocks,

I was into making money.

I got in the training program at Dreyfus

and started investing,

and it fit perfectly for me.

And I'm making a fortune.

I'm making all this money.

I bought a Galaxy convertible.

I had a beautiful girlfriend.

And life was good, and I figured,

"This is the easiest
damn thing I ever did."

And Jack Dreyfus came to me,
said, "You know,

"Carl, you're a smart guy.

"You're gonna lose every penny
you got there.

Learn to be an investor, not what you do."

He says, "You're just one of the fools."

I said, "Come on, Jack,
move over," you know, we're laughing.

And I learned a great lesson.
You always pay for hubris.

In '62, the market broke.

Terrible.

Jack was right.

I was wiped out.

I don't know which went first,

the Galaxy or the girlfriend I had.

After that, I never played
the market again.

Really, literally, I went to work.

I had to learn one area
and be an expert in it.

I looked at the option world.

I realized there was something awry,
that there was a problem.

Options were mysterious.

What should they sell for,
what should you buy them for?

You had no place to really know and look

about what was a good deal.

The option brokers were all...

I wouldn't say thieves,

but you would say they didn't give a damn.

So they would go buy these options

and make a huge markup on them.

So I came up with something called

"The Midweek Option Report,"

that would tell people,

"This is what you should have
been getting for your option

and this is what you got,
and you got screwed."

MIDWEEK OPTION REPORT

And I'm an obsessive worker.

I would stay down on Wall Street
working till midnight,

calling people up because in California
it was only nine o'clock.

I didn't know about mugging or anything.

I'd go back, I'd be the only guy

on the subway going uptown.

And I was looked on as an honest broker,
and the business boomed.

And I became one of the biggest brokers on
Wall Street doing that.

But in the evolution of Carl,

to be a real player, he had to have a seat

on the New York Stock Exchange.

I had saved
a few hundred grand,

and my uncle had some money,

and I decided to buy
the seat on the Exchange.

Tell me when you're on.

I was...

17 when Carl was born.

He was like a kid brother.

Elliot was a man about town.

He was distinguished

and polished.

Carl learned a lot from Elliot.

He wanted to start his own firm,

and in order to do that,
you had to buy a seat.

Uncle Elliot
loaned Icahn $400,000

so he could buy a seat on
the New York Stock Exchange.

No, I knew he would be a success at it.

Then he started his own firm.

Icahn began
with options and arbitrage.

Then in 1979,
he had a new idea: takeovers.

He told Uncle Elliot

he was going to start going
after undervalued companies.

I said, "Well, what do you know
about undervalued companies?"

He says, "Look, I'm going to do it."

I said, "Carl, forget it."
I thought he was crazy.

I'll give you some scotch here.

He just bought it today.

It's good for ya.
Here, let me give it to ya.

No, I don't want any more.

Hey, you look good, Elliot, you look good.

- I look good?
- You look okay.

You look fine.

She's gonna give me a haircut.

In the early '80s,
there were an awful lot

of young, white American men
in search of fortunes

who were flooding into Wall Street

and wanted to know

that what they were doing was okay,

because everybody would go home on Sunday

and your mom would say, "Jimmy,
what do you actually do?"

In the last five years,

we've moved from malaise

to hope, confidence, and opportunity.

But Reagan comes
and there is a feeling

of a laying on of hands,

that this is okay,

that pursuing money, it's not only okay,

but it's somehow good for the country.

It was like Reagan telling everybody that
it was okay to party.

We're going to turn the bull loose.

If you didn't
live through the '80s on Wall Street,

it's almost impossible to understand.

- Zurich 23 Citibank.
- 350, Nelson.

The chaos... it was like
a financial disco.

The old guard,
it took 'em years and years,

and new people on Wall Street,
they wanna do it in two days.

The 1980s was
the reimagining of Wall Street.

It was when there was these swashbuckling

financial pioneers
who were changing the game.

A new breed of businessman,
the corporate raider.

Carl is the original.

He was the guy that reflected the '80s

and taught everybody else

how to do those corporate raider
takeover deals.

It all starts when
a raider finds a company

whose stock is selling
below its true value.

The raider moves in
and the battle begins.

To either sell the company,
sell some parts of the company,

reimagine the company.

And their goal is to raise the stock price

and make money.

Icahn is the man who's been
changing the face

of American business.

Icahn raids on some big names,

like Marshall Field,
Hammermill Paper, Dan River,

Phillips Petroleum,

Uniroyal and ACF.

Corporate raiders

were very controversial.

A lot of people essentially thought

they were glorified shakedown artists.

Again, I'm not doing it
because I'm Robin Hood.

I'm doing it because of the financial...

absolutely because
I want the financial gain,

but I think it's a very good thing that I
do, and more people should do it.

Raider? What in the hell am I raiding?

I'll go in here and take a big
position in the company,

I take the risk.

I make something happen.

How do you identify me as a raider?

When we started
to do "Wall Street" in 1987,

we went to Icahn's office,
Stanley Weiser and I,

who co-wrote the script with me.

He gave us about an hour,
and it was quite interesting

because... he was arrogant,

in the sense that he was telling us

about the new way of doing things

and how it was necessary
to attack these companies

because these are outdated companies.

They take profit for the executives

and they don't care
about the shareholders.

You own the company.

That's right, you the stockholder,

and you are all being royally screwed over

by these... these bureaucrats

with their, their steak lunches,

their hunting and fishing trips, their...

their corporate jets
and golden parachutes.

This is an outrage!
You're out of line, Gekko!

You know, there's
a purity to that speech

in what's wrong
with the corporate America.

It doesn't surprise me
that part of that famous speech

is informed by talks
that Stone had with Carl.

We almost have what I consider to be
a corporate welfare state.

You have levels and levels
of vice presidents in corporations

that really actually produce nothing.

Teldar Paper has 33
different vice presidents,

each earning over $200,000 a year.

Now, I have spent
the last two months analyzing

what all these guys do,

and I still can't figure it out.

I couldn't figure it out,
what these people,

taking up five floors
in New York City, did.

That's a true story, true story.

The new law of evolution
in corporate America

seems to be survival of the unfittest.

I believe it's anti-Darwinian,
survival of the unfittest.

Well, in my book, you either do it right

or you get eliminated.

Of course, there is
some truth to that,

but nonetheless, Gordon Gekko
is out for himself.

He's for personal profit
over public profit.

So Gekko is half right
and he's half wrong.

As time went on

with the insider trading scandals,

the feeling was, "You know, right.

These guys really are
just shakedown artists."

But Carl Icahn was not known
as an insider trader,

and suddenly he emerged from this pack

of patrolling sharks

and began to be capital-C Carl
capital-I Icahn.

Carl was possessing an intellect,

a focus, and a sustained drive

that was unusual.

And one of the signature deals,

one of the most involved, was Texaco,

in which Carl... played a starring role.

A household name,
please welcome Carl Icahn.

Thank you, thank you.

I'm telling you, these stories are funnier

than the jokes you could tell,
'cause this really,

I'll give you another one
that really happened.

And I talked to this guy today,
he said I could tell it.

We were taking over Texaco.

Texaco was, you know,

one of the fabled Seven Sisters.

It began as the Texas Company
outside Beaumont, Texas,

and it was the fifth largest
company in America when this all started.

This all began as a fairly
plain vanilla takeover.

One medium-size oil company,
Pennzoil in Houston,

goes after another one,
Getty in Los Angeles.

So the deal is done,

when out of nowhere,

Texaco swoops in

and snatches Getty away from Pennzoil.

The amount boggles the mind.

$10 billion offered by Texaco

and accepted by Getty Oil in principle

to accomplish the largest
merger in corporate history.

Pennzoil CEO Hugh Liedtke

was fit to be tied.
He was gonna get Getty.

He was gonna go to war,
and it became a war

really unlike anything else in,
on Wall Street in the '80s.

There just had never been
anything like it.

You know, it is a soap opera.

You have the classic ingredients.

You have greed on one side
and fear and loathing on the other.

Pennzoil's CEO
went and hired a lawyer

named Joe Jamail in Houston,

who is a very different type of fella.

Jamail was famous.

He wore snakeskin boots,

big pointy toes,
flew in his own private jet.

He was a larger-than-life character.

Joe came from
the world of personal injury lawyers,

and the only way he gets
paid back is if he wins.

So no one had more at stake
in this than Joe Jamail.

This is a totally irresponsible act,

and... one more sleaze move
that they're gonna slide in.

Texaco, they go down there and they say,

"We're not going to dignify this case."

And Jamail loves that

'cause his jury are all his cousins
and stuff up there...

And so Jamail loves that stuff.

And Joe Jamail was as good
at orchestrating

the goings on in a Texas courtroom

as anybody that's ever walked the Earth.

Here in Texas, they're calling it
the showdown in the courtroom.

And Wall Street traders have
observers in the courtroom

with cellular phones talking to New York.

When the jury
returned its unanimous verdict,

Pennzoil and Jamail emerged victorious,

the winner of the largest
jury verdict in history.

A Texas jury has ordered
the Texaco corporation

to pay more than $10.5 billion
to Pennzoil.

And would have to start paying interest
on that amount immediately.

The biggest bankruptcy
in American history.

Texaco Inc. filed for protection...

It was a decision
of last resort,

said Texaco president James Kinnear,

to file for court bankruptcy protection

in order to prevent Texaco
from collapsing entirely.

The CEO of Texaco, Jim Kinnear,

went absolutely berserk

and in my view

was recklessly willing

to gamble the whole company.

The value of Texaco
stock has taken a nosedive.

Most of us thought, you know,
it actually did look like

Texaco could go under.

And I think the only person
who thought it might not

was Carl Icahn.

You have to buy things

where the rest of the world
are looking at you

and thinking you're a little bit crazy.

You're going against the trend.

A lot of times, events are overblown.

Overblown on the good side,
overblown on the bad side.

My instincts looked Texaco

as a really good fundamental company.

This thing is dirt cheap.

I took a shot and bought all that stock

'cause I knew they had to get rational,

and I was going to get instrumental in it.

Jamail calls me up and he says, you know,

"You're a sensible man.

I wanna come talk to you.
You own a lot of stock."

And he calls me "boy."

"You got a lot riding on this, boy."

But before he came, I called Kinnear.

I get Jim on the phone.

You know, he says,
"I'm not talking to anybody,

and I'm not making any settlement offer,
and that's it."

I said, "Okay, I want you to do this,
so just listen to me.

"I'm gonna start
with numbers from 12 down.

"12, 11, 10, Jim?

"And when you get to the number
that you will settle for

"and accept to get this fuckin'
thing over with,

all you gotta do is say
'okay' and hang up."

So I started, "12, 11, 10, 9..."

I get to 3, he says "okay" and hangs up.

So now I know he would do it for 3.

So now Jamail walks in with Liedtke,

and Jamail says...

I said, "Come on, this is
the biggest bullshit case

I've ever seen, so stop the bullshit."

So he goes, "We would settle
this case for $10 billion."

So I say, "You know, Joe,

you ain't never gonna get
$10 billion so forget it."

And Liedtke gets up, irate, you know.

It's a little bit of an act,
and he says, "I'm leavin',"

and the two of them start walking out.

Jamail turns around
as he gets to the door.

He says, "You know..."

YOU AND I CAN TALK A LITTLE
WITHOUT THE FAT MAN.

"Let's you and I go have a drink."

I said, "It's 10:30 in the morning.

I'm here on Sixth Avenue. Where the hell
am I going to have a drink?"

So now we go out, walking on Sixth Avenue.

And the Parker Meridian, we walk in there,

and it was like, you know,
they weren't ready for lunch yet

and they had all the chairs
on the tables and all.

But I know the ma?tre d' a little.

I said, "I wanna have a drink."
He said, "We're not open."

I said, "Just take
those two chairs off the table

and bring me a bottle of vodka."

And that's it.

And Jamail sits down,
he's taking the vodka. So he goes...

YOU HEARD THE FAT MAN.

YOU HEARD ME.

NOW, WE SAY TEN BILLION...

WE MIGHT TAKE A LITTLE
SMIDGEN LESS THAN TEN.

I said, "Don't even negotiate." He said,

"Well, you know we ain't takin'
less than nine billion."

He's now down to nine or something.

I said, "Do you want the number,

or you wanna just bullshit?"

He looks at me and he goes...

I SEE SOMETHING IN YOUR EYE.

YOU KNOW...WHAT

I CAN...SETTLE FOR

I said, "Yeah, I think I know."

I said, "There's no negotiating.

The number is $3 billion."

He looks at me and he goes,
takes his hand...

YOU GOT A DEAL.

I'LL DELIVER THE FAT MAN.

YOU DELIVER THE IDIOT KINNEAR.

THE FOUR OF US WILL BRING A LAWYER
IN AND WRITE THIS OUT.

AND IT'S A DEAL.

And I said, "Okay."

And now he's sitting there
and he's drinking the vodka,

and he's laughing,
he's got the Stetson hat.

And all these people are coming in now.

I say, "So, let me ask you
a question, Joe."

I say, "The way I figure it,
you just made yourself

$600 million for three weeks' work."

"Yes, I did, yes, I did.

"You're right, you're good at math.

"$600 million," he smiled.
People are listening now.

You know, all well-dressed
people looking at this guy

with his feet up on the table.

I said, "Well, what good works
are you gonna do?"

"What you mean 'good works'?"

I said, "Soup kitchen,
you know, medical research."

"I'll tell you what I'm
gonna do with the money.

"I'll tell you what..." and he did it.

"I'm gonna buy pussy!"

"I'm gonna buy pussy!"

The headwaiter comes running over,

headwater comes running over and says,

"You know, Mr. Icahn,
I think you better leave."

I say, "Yeah."

That's it, and I left. That was it.

A multibillion-dollar
settlement early today,

the largest legal settlement
in this country's history.

Texaco has agreed
to pay Pennzoil

a staggering $3 billion
to settle a court case.

Carl walked into this situation

and basically forced
a settlement down Texaco.

Carl was not done after the settlement.

He saw continued potential value

and made a pretty hefty profit.

I think it was around $600 million

that he made on that transaction.

On Wall Street today,
the trading was heavy.

One reason: the sale
of a huge block of Texaco,

42 million shares worth $2 billion.

That is the biggest single trade
ever on Wall Street.

The seller is believed to be
the takeover specialist Carl Icahn.

Let me show you something.

You can use this. This is sort of
something for ya.

So...

This is sort of one
of my favorite pictures.

Look. This was sent to me by Joe Jamail.

And, you see, this is the way
he was in the restaurant,

when we talked about it.

You see the shoes.

And he was a real character.

And he writes, "Friend Carl,

shit happens."

"Joe Jamail."

So I keep this around.

When I started out,

I learned the hard way,

playing the market,
it's a competitive area, it's gambling.

Too many variables, too many
people competing with you.

You can't believe that
the gambling will carry you.

So, you look for something
I call a "no-brainer."

Very little risk, but a lot of reward.

After a while, it becomes
somewhat instinctive,

that you see something
that's not really apparent to everyone.

But there's tough times
when you're not gonna enjoy it.

You know, you're gonna lose
and you gotta be willing to say,

"Hey, if I lose, so what?"

It's like that great Rudyard Kipling poem.

"If you can meet with Triumph and Disaster

and treat those two impostors
just the same..."

That's important.

But you have to have a passion for it.

You get a great feeling
when you find a company,

when you find something you can do.

You get excited by it.

And by instinct now,
something goes "click,"

and you know it's good.

It all sums up
in that movie "The Hustler,"

where, when he shoots the ball, he says...

You know, I got a hunch, fat man.

I got a hunch it's me from here on in.

One ball, corner pocket.

I mean, that ever happen to you,

where all of a sudden,
you feel like you can't miss?

When I hear the click, I know I won.

TWA presents the difference

between getting you where you're going

and leading the way.

What's that?

What was that?

Waiting for the equipment to warm up.

I see you have problems
with equipment as we do.

I thank you all for coming.

I'd just like to say that...

we're doing quite well
with our scheduling.

TWA, I can tell you now
for sure, is here to stay.

This was an awful time
in the airline business.

And a lot of these companies
were under fire,

were the focus of corporate raiders.

And when this fella, Frank Lorenzo,

goes after TWA...

he was deeply, deeply
unpopular in the business.

Show me a business person
that doesn't like a monopoly

and I'll show you a big liar.

Okay?

Lorenzo was known
for being tough on unions.

So, at TWA,

the unions actually went to Carl.

So they all met with me.

They really wanted me to come in

because they needed somebody
to fight off Lorenzo.

Today's TWA is the new spirit

and vitality of our people.

So they said, "We'll give you
huge concessions if you do it."

So I looked at the numbers
and said, "Yeah,

"if you guys give these concessions,

you could just save
a lot of capital here."

The staff gave me this toy plane

to commemorate the TWA deal.

Carl Icahn takes control
and is now running TWA.

Carl Icahn, the controversial financier

known for his attacks
on corporate management.

Now they will be watching
to see how he himself

handles the management
of a major corporation.

Carl had never
run anything before.

Certainly nothing like an airline.

You're dealing with the economy,

you're dealing with unions,

and that was his biggest fight
right off the bat.

We want a TWA that can exist
and it will exist

because all the employees
have come behind us.

The employees have given.

When it came time to give the concessions,

the pilots lived up to their bargain
and so did the machinists,

and then the flight attendants,
Vicki Frankovich,

comes in and says, "We can't do it."

Carl Icahn came in and demanded
changes in everything.

She said, "You got enough, it's too bad."

I said, "Bullshit. You made
a deal, you got to stick to it."

Carl Icahn not fair
to flight attendants!

Fifteen days into the strike
by TWA flight attendants,

there is no sign of
conciliation by either side.

At issue, company-proposed wage rollbacks.

TWA employees confronting
a bottom-line businessman.

The work rules we must have to survive.

We are not asking for very much.

The changes he's asking are drastic.

This company
would have been bankrupt

if I hadn't come along
and saved the damn thing.

Carl Icahn is a corporate raider.

You know, literally they'd say,
"We got you by the balls,

the great Mr. Icahn,
because you need us to fly."

So, what I thought of is this,
I said, "Wait a minute,

why can't we just bring in
new flight attendants?"

"Because they gotta be licensed."

I said, "Set up a school
for flight attendants."

"I don't know.

We can't do that."
I said, "Well, why not?"

"Nobody ever did that."

I said, "Set up the goddamn school,"

and from all over the country,
I couldn't believe it,

all these people want
to be flight attendants.

And then Frankovich now goes crazy.

She sees all this happening.

The flight attendants are out here today
because they want to show Carl Icahn

that we are still united and we're still
determined to win this battle.

We're holding together
better than any other union

I know that has struck in the past.

Some woman down the road
calls me up, panicked.

"There are a thousand people
walking up the road,

chanting and screaming."

"What's going on, Carl?" you know.

She says, "I'm calling the police.
I'm calling the police."

These flight attendants
took the unusual step

of taking their case right to the home

of TWA chairman Carl Icahn.

I said, "Bullshit," and I went
out there with the kids.

"You're not taking the kids."
I said, "I'm taking the kids."

Here's the lies right here,

our new work rules.

Well, that's what... this is, this is...

You know, I can't...
You're being a little...

- Quiet, let him talk.
- You've got an airline

that's losing 200 million bucks in '85

and it's losing a lot in this quarter...

'Cause we can't compete.

Can I finish?

You wanna listen? You come to my home
on a Saturday,

I've still come out here to talk to you,

and I want... and I think you should
give me the courtesy

to listen as long as I'm talking to you.

- That's fair.
- Miss Frankovich

should have come
to that meeting in August,

you don't like to hear it,

because at that time
I could have got financing.

I told her I need three people there,

she says, "I'm going to a party,"

and that's the truth of it.

I'm telling you what happened.
You don't wanna hear it.

- That's a cheap shot.
- Now, let me finish up.

Could I? Then you can talk.
Instead of yelling.

- You're brainwashed.
- No, we are reasonable.

I mean this. I am not here to hurt you.

I think a lot of people are getting wrong
information from her.

I'm getting a lot of calls from
a lot of flight attendants,

say they'd love to come back,
they're being intimidated by her...

- that they're being scared by her.
- No!

That is good.

Yeah, I remember that.

I wanna keep that, that's a good clip.

Show that to my grandchildren.

I have a whole group that's willing to
meet. She says she wants me there.

You can't force me to like somebody, okay?
I don't like dealing with her.

Okay? Because she lies. But that doesn't
mean I don't have a whole group of people

that are there qualified to talk to her.

We're willing to talk.
I don't wanna be there with her.

It was sort of exciting.

The strikers didn't understand.

Frankovich told them a lot of bullshit.

And a lot of them agreed with me.

After a week, she pulled them off,

she wouldn't let them come
to my house anymore

'cause they were all
now complaining to her.

I don't know if Carl expected

that he was gonna have
this kind of turbulence

right off the bat.

I think he would tell you
he thought he was

fighting the good fight,
and yet what he was doing

played into every stereotype

of the evil Wall Street financier.

The companies that he leaves behind

incur a tremendous amount of debt

and then they start laying off,

and that's more and more Americans

falling below the poverty line.

I've been seeing
a counselor since the strike

because it is emotionally
devastating to have lost...

I mean, I've been a flight
attendant my entire adult life.

Every one of those flight attendants

could have walked across
the picket line, which many did.

Many of them said, "Hey, Vicki Frankovich,
the heck with it."

They could have kept their jobs.

I didn't tell you not to cross,
we begged you to cross.

We came out, we told you over and over.

They had work rules
that we couldn't afford.

If I hadn't come along
and borrowed $700 million

on my name, you'd be chapter 11.

If you're chapter 11,
it wouldn't do you any damn good

'cause you wouldn't be working,
you'd be like Eastern.

Pan Am, Eastern, and Braniff,

there was a whole bunch
of them that went under.

And during that period,

we turned TWA around,
for a couple of years.

The U.S. is a bargain

if you know where to shop.

And the best place is today's TWA.

We've got low air fares
to terrific cities...

We brought innovation
with a business saver fare.

Bargains on the ground, too,

like our travel value pack.

We created
the flight attendants school.

I made mistakes with it, though, I mean, I
made a lot of mistakes with it.

And then it, then it got
from bad to worse.

The problems were endemic.

People weren't traveling
to Europe for a while,

you had that Desert Storm that came.

There were a lot of other things, too,

with the terrorism.

He was perplexed.

"Why can't I figure this out?"

He's always had a magic wand.
Didn't work here.

Carl eventually took the company private,

but it was loaded with debt.

And TWA ended up filing for bankruptcy.

I really believe that, you know,
you look at the results,

and if it doesn't work,
you blame yourself, I guess.

I'm taking you back to where I grew up.

You've always asked me as a little girl,

and I'm gonna show you,
before I moved to Florida.

- So little...
- I've heard so many stories.

So little, but I grew up there.

I think it wasn't...
it wasn't until I was older

that I really, I think,
got a better understanding

of where my father grew up

and the different challenges
that he probably was facing

that were maybe responsible

for making him so tenacious.

My parents, they only
made around 5,000 a year,

but that's all they would talk about.

Maybe that's why I was
so interested in money.

They hated the rich people,
but they were so into it.

Okay, we're here.

You're coming up to my house.

I remember it
from photos, but this is...

- Yeah, I remember it well.
- ...it's so cool seeing it.

Yep.

Mr. Icahn, how are you?

- Okay.
- Moishe Russell.

Good to meet you, and thanks
very much for having us.

Brings back memories, that's for sure.

My father had all this musical stuff,

because he loved to sing.

And he had a Presto record recording.

Your mom had a wall right here.

No, they took the wall out.
This was the dining room.

They kept telling her, the house would
fall down if you took the thing down.

But she found a builder
that said, "Bullshit,

I'll put a beam up there,
the house is fine."

'Cause she was tenacious, my mother.
Boy, she was tough.

But you know, when you
needed her, she was there, I'll say that.

You know, like sometimes if I feel down
or have problems,

she was always a real good problem solver.

But... egomaniac.

She was a complete egomaniac.

I mean, everything she did
was right, you know.

She, she had the answer to, to everything,

and she was really... you know.

But people liked her.

She was funny, you know,
she had a good sense of humor,

except with me.

I had to be perfect to her
because I was her kid.

So anything she did was perfect, right?

So, I was supposed to be perfect.

She was so strong-willed
and I was strong-willed,

so... we always had a stormy relationship.

look at this. Wow.

Where are we right now?

Temple Beth El.

I was bar-mitzvahed here.

Yeah.

It's beautiful.

My father used to sing
here and he was the cantor,

and I was bar-mitzvahed here.

- Wow.
- But he wasn't religious at all.

They would sit here, the trustee, maybe,

and my father would sing,
I don't know which one, maybe over there.

Yeah.

I haven't been back, I think,
for close to 70 years.

You feel the ghost
of your father in here?

Nah. Nah.

My father was a very strange guy.

Even though he was
the cantor at the temple,

he was a dyed-in-the-wool
dogmatic atheist.

And he was, in my opinion, a communist.

My father was also
the Irish tenor on Sundays.

And so...

He was. He just had
a great voice, you know.

It was, Michael O'Cahn
was coming and he would sing "Danny Boy,"

and he just wanted to sing, you know?

I never inherited his love for real music.

I mean, I never had any talent.

He's the guy that said to me,

"Your mother has great talent in art.

"I have a great voice.
We're both talented people.

"Now you, on the other hand,
have absolutely no talent.

"Go be a doctor.

The doctors, look what they charge you."

He had no filter for what he said.

My father was an interesting character

'cause he didn't,
he didn't really give a damn

pretty much about...

Well, he did, he got outraged at people.

He really, I think I got
this sense of outrage from him.

Yeah.

I was never close to him.

I never respected him or admired him.

My father, he never asked me what I did.

Even when I went on Wall Street
and I was making the money,

he never tried to have me explain it.

He never asked, he never got into it.

And finally, in Florida,

I went down there once
and he had a pad and pencil.

"Come here, come here.
Explain to me what you do."

And I said, "You finally admit it."

And then we hugged.

I still, I still cry about that.

Why do you cry?

I don't know.

I don't know.

I don't know why I do.

I felt...

a certain warmth.

A certain warmth.

That was, that was my father.

They, they say, "Thou shall not kill,"

and later on you go, "An eye for an eye,
a tooth for a tooth," right?

So they're all sort of contradictory.

Some say Carl Icahn was
20 years ahead of his time,

battling the corporate world

in the name of shareholder value.

Come on!

When TWA filed for bankruptcy,

it hurt his reputation, but he pressed on,

returning to the scene
with years of proxy fights,

all the while demonstrating his knack

for corporate combat.

Herbalife is a global nutrition company

that sells our products exclusively

through a network of people just like you.

Herbalife is a nutrition company
based in California

that Carl Icahn probably
had never heard of.

I mean, nothing.

Until Bill Ackman showed up.

Throughout my career, the vast majority,

particularly our most
successful investments,

have been ones that have been
controversial in one way or another.

Bill Ackman is another one
of the major activist investors out there.

He's a fellow billionaire.

One of these masters
of the universe in New York.

Harvard educated versus Carl's Princeton.

Although unlike Carl,
he was born into privilege.

He also likes to publicly
spar with companies the way Icahn does,

but he goes about it
in a slightly different manner.

And please welcome Bill Ackman.

Okay, so we've got a lot to cover today,

so we're going to move pretty quickly.

Why don't we start...

So Bill Ackman decides

that Herbalife effectively
is a fraud, it's a scam.

Herbalife is a pyramid scheme.

It's caused enormous harm

to millions around the world.

Our goal is for the facts

about Herbalife to be made public.

And he believes that
if he's able to expose

what he believes are the
company's frauds to the public,

that regulators are gonna jump in

and the stock is gonna tank.

I don't want to make
any money from this, okay?

I view this as blood money,
but let me be clear.

We'll short the stock.

Herbalife stock goes down, we make money.

Herbalife stock goes up, we lose money.

He's gonna short the company,

so he's gonna bet that
the stock is gonna fall

all the way to zero.

A pyramid scheme is actually a modern-day
version of a Ponzi scheme.

Carl, meanwhile,
is watching this all play out.

...the version is called 3.0.

It's 1.0 is the Ponzi scheme.

And he's thinking to himself
that Bill is gonna lose,

that he's never gonna get the stock to go
even further down

and effectively bets against him.

Ackman is a real,

I think, a smart guy and a good investor.

He might have talked himself
into believing

that he was going to be a savior,

but I felt that Ackman had an agenda.

Icahn and Ackman had done a deal together
some years earlier

where the contract was somewhat ambiguous.

And the court eventually said
that Icahn had to pay.

After Carl paid Bill,

the unwritten rule on Wall Street,

"Don't gloat about your victories."

Bill went to the newspaper
and he gloated about the victory

and that pissed Icahn off
like you don't know.

I think Herbalife was personal.

Ackman's whole thesis
is completely wrong.

I mean, I can't even
understand his argument.

I was walking through the CNBC newsroom,

and I saw Carl on TV on another network

absolutely annihilating Ackman.

He may believe what
he's saying, I don't know.

Herbalife gives jobs to people.

I mean, it's absurd what Ackman is saying.

And I stopped in my tracks and I said,

"This is unbelievable."

And I was kind of mad that
it was happening somewhere else.

But I went and I called Bill.

And I said, "Do you want
to respond to this?"

And he's like, "You know what?

"Carl's an asshole.

"I'm sick and tired of this bullshit.

"He tried to take advantage of me.

I'll come on, I'll do it"
So I said, "Great."

Carl has been
maligning my reputation,

so it's very important
that we get to the facts.

Ackman comes on,
we're talking about Herbalife.

Carl, he can try to scare my investors
from investing with me,

which it sounds like he's attempting.

And then Carl calls in
to the control room.

I look down at my computer
and there's a tweet

from a CNBC colleague of mine,

and it says, "This is gonna be good."

All right, welcome back

to the "Halftime Report," live today from
the New York Stock Exchange.

We've been speaking with
hedge fund investor Bill Ackman.

Now it's time to hear what Carl Icahn
thinks of our conversation.

He joins us live on the phone.
Carl, are you there, Bill, there?

- Okay, good to talk to you.
- I am here as well.

You know, Carl,
you have an issue with the way

that Bill went about the Herbalife short

as aggressive and as publicly as he did,

and he's essentially saying
that you're a hypocrite.

How do you respond?

Let's start with what I want to say.

I've really sort of had it
with this guy Ackman,

'cause Herbalife is a classic
example of what he does.

You scare the hell out of people,

get the stock down

and make 600 million bucks on paper

and tells the world how great he is.

I had dinner with him.

I couldn't figure out if he was

the most sanctimonious guy
I ever met in my life

or the most arrogant.

And I'd like to give Bill
a chance to respond to you as well.

Carl has been... is gonna try
to attack my integrity.

And Herbalife, we're not scaring people

but going through the facts
about the company...

If that wasn't scaring people,
you could have fooled me.

And we will either
be proven right,

or we'll be proven wrong.

There had never been quite a showdown

between two people of such high stature

as Carl Icahn and Bill Ackman on live TV.

He's not giving it to charity,

assuming they don't need
charity themselves.

Let me do this, I mean... Carl.

Now, that's what
I'll say about Ackman, okay?

Let me remind you that
we are on live television.

We're doing the show that day
at the stock exchange,

and it's on a delay.

So each time Carl would say
something nasty about Bill,

two seconds later you would hear all
the traders on the trading floor...

He's the quintessential
example on Wall Street,

if you want a friend, get a dog.

And he does a pump-and-dump...

The guys on the trading floor

down here at
the New York stock exchange...

Same thing when Bill would,
you know, insult Carl,

the floor would erupt.

This is not an honest guy.
He's a bully, okay?

Says he doesn't like
behaviors that are bad...

It quickly devolved into a battle, a war.

Ackman is a liar, okay?

He's got one of the worst reputations on
Wall Street. The guy is a major loser.

The big issue about Carl Icahn is he's not
used to someone standing up to him.

Carl, you wanna bid for the company, go
ahead and bid for the company.

Hey, you don't have
to tell me what I'm free to do.

I'm reporting from Davos, Switzerland,

at the World Economic Forum,

where all the CEOs
from around the globe come.

And I remember being at a cocktail party,

trying to get Wi-Fi on my phone
so I could watch it,

and literally a swarm of CEOs

standing around, we were all watching...

I appreciate, Bill,
that you called me a great investor.

Unfortunately I can't
say the same for you.

It was like must-see TV.

Simply said to him, I said, "Look, Carl,
you are no friend of mine."

You couldn't take
your eyes off of the thing.

Do you think
I wanna invest with you?

I wouldn't invest with you if you were
the last man on Earth.

Volume of trading
at the New York Stock Exchange

went down 20%,

as everybody was just sort of
standing there watching TV.

I'm telling you,
he's like the crybaby in the schoolyard.

You know, I went to
a tough school in Queens

and they used to beat up
the little Jewish boys

and he was like one
of these little Jewish boys,

crying that the world
was taking advantage of him.

Let me, guys, we're gonna...
we're gonna end it there.

Bill Ackman, Carl Icahn,
we'll go to break.

Herbalife played out
for a number of years,

but it was really a foregone
conclusion from that moment,

because once Carl emerged,

Bill didn't really have a chance.

Just as the markets are falling,

Herbalife is hitting
an all-time high today.

Carl wasn't going to go anywhere.

And Wall Street was betting with Carl.

Herbalife is officially

the worst investment ever made
by Pershing Square.

Bill lost the majority of
his investment in Herbalife.

It was a billion-dollar short.

And eventually Bill
just threw in the towel,

and Icahn, he won.

It obviously felt good.

It felt good that I beat him.

We did have a vendetta, and I
felt he had screwed me once,

so it felt good to do it.

But I certainly have no grudge,

and at the end of this whole thing,

he called me up and
congratulated me on the victory.

And I think it was a classy thing to do.

But the winning, that's not
the motivation for me.

The motivation is just, find the good one.

Find something you know is gonna be good,

and the odds are greatly in your favor.

Winning, it's almost...

a bit of a letdown, actually.

You know, you did it all. Now it worked.

On to the next one.

Pretty good. I made a good one.
Fairly good. Fairly good.

Carl wasn't typically
interested in tech companies

'cause they weren't his kind of companies.

Why is Carl Icahn,
first of all, investing

in a private tech company?

How did he end up
in the tech game?

I started working
for my father as an analyst

back in 2002.

There were several of us at the time.

I was definitely
the youngest of the group.

I sort of had a privileged "in,"

you could, you could say.

But I had, you know,
I had learned quite a bit

about accounting

and I took economics in school,

so it's not like I was
completely a fish out of water.

I'll say this about Brett,

he's much more low-key than I am.

But he's one of the most
obsessive characters,

and he'll work very hard at something,

extremely hard,

especially if it means
beating me at something.

He's not quite
as pushy as Carl.

He's more analytical.

He is definitely more risk averse.

But they have a lot of similarities too.

They both love history.

They're war buffs.

For a while, they played
a Sunday night game of chess

every week.

But they had to stop that because Brett,

he got too good and kept winning.

Carl, I think,
is very proud of Brett.

He wanted to praise Brett
to me on a couple of occasions,

but he would sort of pull himself back

because he didn't want
to make it too easy for him.

So he worked for me ten years.

Another guy in the firm, a very smart guy,

named David Schecter,
they came to me, said, "Look,

we're not gonna stay here
unless we get some money to manage."

You know, "We're not gonna
just do research."

So I figure, well,
I'll teach them a lesson.

I'll give them some money.
I made it a tough deal.

It was actually like
a very difficult deal.

You know, I said, "Okay, you can have like

"7.5 percent profits, each one of you,

"but you are gonna have
to meet this hurdle rate

"of 7% before you make a penny.

No salary, no income, no nothing."

And they both agreed to it.

And I think Brett
really expanded Carl's mind

in terms of what makes a good investment.

It was Brett who called
Carl's attention to Netflix.

Mr. Icahn owns
2.2 million shares.

That makes him one of the largest
shareholders in Netflix.

Netflix,
Netflix the big winner in today's trade.

Netflix was a no-brainer
when we first went into it.

Everybody didn't like it
when we bought it.

So Netflix went on to b one of their most
lucrative investments ever.

I think they made around $2 billion
when all was said and done.

As I remember
the Netflix success,

and it was a huge success for Carl,

was, whoa.

I mean, we knew this guy was back,

but he's now back and he gets tech.

You know.

If I were the CEO of
a tech company at that stage,

I would have been a little worried

that I might be the next person
he was looking at.

Apple was an example of a company

that was just really cheap

on a fundamental basis of cash flow.

Brett noticed that Apple
had immense amounts of cash

sitting on its books,

and the stock price
wasn't reflecting that.

Apple is now sitting on
almost $150 billion in cash.

It was about the finances of Apple.

It was about, could Apple
buy back their own shares,

and if they were able to do that,

how much more of a higher valuation

should be ascribed
in the marketplace to Apple?

When we pitched my father Apple,

it was just so easy for him
to see this cash problem.

For a guy like that, to show him just
those basic fundamentals

about a company, he just
started salivating right away.

When Twitter came out,

I, I didn't even know
what it was, frankly.

And Michelle, she comes up
with great ideas.

She said, "You ought to have
a Twitter account."

I said, "Come on, I'm not gonna do that."

She says, "No, no, you have
to have a Twitter account."

And then, when we bought Apple,

she said, "Well, let me tweet that,

that you own Apple."

So I said, "Okay, do it."

I remember the tweet distinctly.

And, you know, the markets
kind of went nuts immediately.

Apple shares in focus

after Carl Icahn disclosed in a tweet

that he purchased
$500 million of Apple stock.

...trying to get
a piece of Apple stock...

Announced he had taken this stake on
Twitter, and Apple shares shot up.

Just from that tweet,

Apple's market value jumped $17 billion.

The view on Wall Street is,

what is Tim Cook gonna do about this?

People wanna appease Carl Icahn.

I think people couldn't fathom

that Carl Icahn was
having dinner with Tim Cook.

Tim Cook's visit to our home for dinner

was a very exciting time.

We very carefully went over the menu,

but I sort of like to add my contribution.

For dessert, we had cookies
shaped in an apple shape

with another bite taken out of it,

to symbolize
the shareholders' investment.

So on the night
of the dinner with Tim Cook,

normally my father would get there late,
actually but I think he got there on time

which is a huge compliment to Tim Cook.

We talked to Tim

about all the different stuff
going on within Apple.

You know, anything that he could
tell us publicly, anyway.

And then eventually the small talk evolved

into, "Hey, you should
buy back more stock."

Carl clearly wanted to get Tim

to pursue a massive buyback program.

And I think Tim wanted
to quiet the rhetoric.

Now, I don't say every
company should do buybacks

for the purpose of financial engineering.

In fact, it's overdone.

But in this case, it was crazy for them
to have all of this cash around

and doing nothing with it.

I think Carl expected to find

the typical resistant CEO

who he'd have to a little bit strong-arm,

and Tim Cook sounds to have
been much more Zen about it.

Apple said it had returned

74 billion to shareholders.

It plans to return 103 billion.

When I got the feeling
as an old poker player

that he wasn't really
displeased with the fact

that I was making a ruckus
about wanting to do a buyback.

I think he wanted to do it himself,

but he had a board that was
rather reluctant to do it.

That's what I believe,
but he never said that.

I think the board came around to doing it.

And that's how those buybacks started.

Apple expanding its capital return program

to $200 billion.

That was another billion five right there.

Between Apple and Netflix,

we made for the company about $3 billion,

and overall, across all the investments,

over six years, it was about 5 billion.

I'm really happy to make
my father that much money.

But I think I was worthy
of the Icahn name before that.

He made his father billions of dollars.

He got his own hundreds
of millions of dollars payday at the end,

and he even flirted with the idea

of setting up his own firm.

Wait, wait, we start it together.

There were
rumblings on Wall Street

for years that,

what would come of Carl Icahn
and Icahn Enterprises?

Would his son Brett take over?
Would he not?

Was there someone else in the picture?

I think it was always
a complicated issue for me

because he has some big shoes
that I would have to walk in.

It's like, do you want
to spend your whole life

being compared to this
larger-than-life, you know,

greatest financier of all time?

It's an issue.

Have you read the contract?

I mean, with you and Jesse,
what Jesse sent you?

- I've been reading it, yeah.
- Are you gonna get it finished up?

- We got a lot to talk about.
- I know.

I asked Carl, "Is it true
that Brett will be coming back?"

And Carl said, "You know, we've been
trying to negotiate a deal."

It's been over a year now, though,

and the contract has already
stretched to 90 pages.

It sounds like he was
approaching this negotiation with his son

the way he would approach a business deal.

You should see what Jesse
did to the previous version.

I mean, it's like...
a totally rewritten document.

He does that.

Jesse. Jesse, poor Jesse.

I think Carl and Brett
have a very similar style of negotiation,

which makes it very tough
to mediate between them.

I think, you know,
Carl would readily admit,

I think he... he trained
Brett a little too well.

You're cheating. If you go through the
trees, it doesn't count.

Well, he's afraid. I beat him.

I'm afraid? I won four races
and you only won one.

Big shot, listen, big shot.
I won one, you won two.

Am I Carl Icahn's official successor?

I just don't know if I can
say the word officially.

- Yeah, yeah.
- You're sittin' in the egg.

We had this house
in Miami for a long time

and didn't use it very much.

But as time went on, we decided that it
was a very nice lifestyle

to be able to live here on this island.

It became clear that we enjoyed it so much

that perhaps we should think about

moving our offices down here as well.

That's down 160,

no, 160... 100? That's further down...

Thirty minutes that
it takes to get to the office,

it's a great time for him
to just collect his thoughts

when he's starting his day.

And he loves being on the water.

"I began my career on Wall Street

"nearly 50 years ago.

"From a modest upbringing
in Queens, New York,

I have been fortunate enough
to accumulate..."

I first met Carl Icahn
at a Giving Pledge dinner,

where we were bringing together
people who had large wealth.

And Carl did agree to join the pledge,

which means the majority of his wealth

will go to philanthropic causes.

You know, he helped me with polio.

He supported his wife's
activities in charter schools.

Carl's, to his credit,
been charitable.

But because money is his army,

and because he still enjoys
doing what he does

and he needs the money
to have the leverage,

he probably has not obviously
been able to give away

the majority of his wealth, yet.

What's the relationship
between the two halves of this paradox?

On the one hand, you got
all these generous rich people,

on the other hand, you have the fact

that it's an age of inequality,
an age of anger.

The 25 richest Americans
in federal income taxes,

they paid relatively little
and sometimes nothing.

The political narrative right now is that

average Americans should look
at guys like Carl and say,

"They shouldn't have that much money,"

and, all right, I don't know
whether Carl should or shouldn't.

The wealth gap between

the very rich and the very poor

is getting wider and wider.

Part of it is the ridiculous
amount of money

that top management is paid
for doing a poor job.

Most CEOs are way overpaid.
That's not even a secret.

However, I have no objection to people

that risk their own capital for profit.

I mean, what incentivizes people

is feeling they're going to be rewarded.

The free enterprise system
is supposed to be there.

Thank you.

- We need a piece here.
- Yeah.

A sculpture.

Do you like the paintings on the wall?

I think it's too many.

Too much.

How you doing?
Everything going good today?

Good, yeah.

We're going to have
you guys, the brain trust.

Talk to you later.

Brettsky.

Carl and Brett finally reach a deal

for Brett to return to Icahn Enterprises.

If you just do it pro rata yourself,

it doesn't really help out
your return very much.

Then it doesn't matter
about the 10%, then.

Brett will come
to Carl with investment ideas.

Carl will get the final say
over whether or not they do them.

Anything that they invest in, Brett has to
put a little bit of his own money in.

You might have this job.

So Carl got comfortable

because he's still squarely in charge.

It's exciting.

It's as close to
an official succession plan

as you're gonna get,

and Carl Icahn is gonna keep working

until he cannot work anymore,

and hopefully that's a long time from now.

I like this.

- This is nice.
- Yeah. Very nice.

And they wanted me to settle, everybody
settles. I said, "I'm not settling."

Happy birthday.

Let me see this.

That is the coolest thing.

- Las Vegas.
- I'm keeping...

- This is the coolest.
- Yeah, it's for you.

- Wait...
- Where is my office?

Mom told me that you rented
this place or something?

- He owned that place.
- He owned that.

I owned the Stratosphere!

1978 is when our paths crossed.

Hard to believe it's 42 years ago...

I think that Carl Icahn's had

a profound impact on society.

I think he has changed the way

boards of directors operate,

the way companies think...

Cheers!

...the way shareholders think.

I think all that has been impacted

by Carl Icahn.

I sometimes wonder
if peak Carl

doesn't represent some kind of shift

in the direction of capitalism
in this country.

You can't deny that Carl
is a seminal figure

of capitalism in the last 50 years.

He's a lot of different things
rolled up in one.

I think that's part of the reason that
people are so captivated by him.

Maybe some people
see Carl as everything

that's wrong with the current system,

that people are becoming too rich.

I think the other side of that is that you
could make an argument that

Carl Icahn is capitalism at its best.

A guy who grew up with not much,

who worked his butt off

and became one of the richest
men in the world.

God, this is it.

Thank you. Thank you very much.

- What, do I make a wish?
- You gotta make a wish.

It's like Alexander
the Great, right?

He's 31 years old and he won Persia.

To everybody in the world, he was the best
and the greatest.

But he cried because he didn't think

there was any place else
to go to do a battle.

He put his army together
and then he went to India.

The army all worshiped him,
but a lot of them deserted

'cause they said he's crazy.

He just kept going and going
till they killed him.

And I think about that.
I'm a little bit like that.

Just keep going at it.

Okay, I'll leave that there.

Okay, I think you got everything.

We didn't get everything.
We got a lot...

Well, I'm not doing any more.
Don't even think about it.

No, no, no. For this, for right now,
we did everything.

No, what do you mean,
for right now?

Wait a minute.
I'm not doing this.

So, one time they wanted
to build this terrace behind my house.

My grandfather lived upstairs,
see, so he said,

"Look, if you give me bricks,
I'll build a terrace."

And my mother said, "We can't
afford to pay for bricks."

So I was tired of the arguing.

So I'm in this gang with those hoodlums,

those friends of mine, so I said,

"Get your wagons, guys,"
and they listened to me.

"Okay, Carl, what are we doing?"

I said, "We're gonna take bricks, see?

"Nobody will miss them because
we'll take three bricks here,

four bricks there." "Okay, that's fun."

So we come back with all these bricks.

My grandfather's excited. "This is great."

"I can build a terrace."
And my mother comes home,

says, "What is that?" I say,

"They're bricks, Ma. I got bricks for you
to build your terrace."

And she says, "We can't steal.

That is wrong."

I said, "You cut the bullshit."

I said, "You, first of all,
you keep talking about

you hate these builders, they're
all making too much money."

And she goes,
"Don't talk to me like that."

And my father says,
"Hey, who's gonna miss 'em?

They're not gonna miss 'em."

"Yeah... I guess they weren't
gonna use them anyway."

And we, "Here's the bricks,"
and we took 'em out. That was it.

I just, I'll never forget that.