Carl Icahn Boosts Hertz Position

Activist investor Carl Icahn has filed numerous documents to the SEC recently (13D's and Form 4's) regarding his position in Hertz Global (HTZ).  Per the most recent 13D, Icahn now owns 30.92% of the company with exposure to over 43.92 million shares (inclusive of 2.03 million shares underlying forward contracts).

His recent purchases also are via forward contracts.  Per the filing, Icahn acquired exposure to over 1.15 million shares via forward contracts that expire on September 8, 2021.
The price per share is listed at $14.73 and $15 in the transactions.  And the filing notes that these contracts "Represents a forward price of $12 per Share, plus the amount per Share the Reporting Person paid the counterparty to the forward contract upon entering into such forward contract. The forward price is subject to adjustment to account for any dividends or other distributions declared by the Issuer. In addition, the Reporting Person paid a financing charge to the counterparty to such forward contract."

Carl Icahn Buys Dell Technologies Tracking Stock, Opposes Merger, Sends Letter

Activist investor Carl Icahn today unveiled a new 8.3% ownership stake in Dell Technologies tracking stock (DVMT) with over 16.5 million shares.  He opposes the DVMT merger and released a very detailed lettering outlining his thesis and thoughts (all emphasis his):


Icahn's Letter to DVMT Shareholders

"Fellow DVMT Stockholders:

Over the decades I’ve spent much of my time searching for undervalued companies.  We are very proud of our record.  In fact, an investment in Icahn Enterprises depositary units made at the beginning of 2000 (when Icahn Enterprises began to fully embrace the activist strategy) has increased by approximately 1,514%, or an annualized return of 16%, through October 11, 2018 (assuming reinvestment of dividends).  We have also made hundreds of billions of dollars for stockholders in companies in which we have been activist investors.  However, we freely admit that many of the companies we have invested in were identified to us by stockholders who sought our assistance against mediocre management who were attempting to profit at stockholder expense.  As you know, even the worst management and boards in this country are extremely difficult to dislodge.

A few months ago, several large holders of Dell Technologies Inc.’s tracking stock (“DVMT” or the “Tracker”) contacted me to express their concerns regarding, and their opposition to, Michael Dell’s and Silver Lake’s machinations and activities related to the Tracker, as well as stressing that the Tracker was, and is, deeply undervalued.  (Five years ago, I vehemently fought Michael Dell who many stockholders believed was severely underpaying for the company in a going-private transaction).  After researching the current situation, I quickly realized that while we have unearthed many undervalued opportunities in the past, very few companies compare to the current opportunity and the massive undervaluation of DVMT — which exists in plain sight for all to see.

We Don't Say This Lightly: 

Over The Past Few Months We Have Acquired Beneficial Ownership Of Over 16.5 Million, or 8.3%, DVMT Shares.

We Will Vote AGAINST.

And Will File A Proxy Statement To Solicit Your Vote AGAINST, Dell's Proposed DVMT Merger!

The Dell Tracker currently sells for approximately $92 per share but is worth on a pure mathematical basis approximately $144 per share[1].  In my opinion, this massive distortion exists because (i) as a result of the 2013 going-private transaction, we believe the market does not trust Michael Dell or Silver Lake; (ii) the Tracker has basically zero governance rights and is trapped within a capital structure that has some of the worst corporate governance in America (at Dell, the Certificate of Incorporation even requires that the CEO has to agree to replace the CEO!), however, investor fear of this poor governance is overdone and we believe strong activism combined with litigation, if necessary, can mitigate the governance risks; and (iii) for the better part of the past year, Dell and Silver Lake worked to destroy the value of the Tracker by (1) raising the possibility of a Dell IPO, (2) floating the idea of a merger with VMware and (3) threatening a forced conversion of the Tracker into Dell common stock, among other tactics. These scare tactics are reminiscent of the tactics Machiavelli advised the Borgia rulers to use centuries ago.

The Facts

Several years ago, I believe Dell and Silver Lake realized that Dell Technologies was simply a highly-leveraged hardware company facing great secular challenges and would never enjoy the growth and success of Apple and Microsoft. Therefore, they levered up dramatically to purchase EMC Corporation (“EMC”), a better positioned hybrid hardware and software company, whose crown jewel was its 82% ownership interest in VMware, Inc. (“VMware” or “VMW”).  But, to purchase EMC, Dell needed $10 billion more than its bankers could possibly arrange, and they also needed to convince EMC stockholders that Dell’s offer was worth accepting.  They accomplished this by engineering the DVMT Tracker that they said would allow EMC stockholders to continue to participate in VMware’s upside.

Because a tracking stock is unusual and rarely included as merger consideration, Dell and its bankers had to convince EMC stockholders that the Tracker would efficiently “track” the economic value of VMware shares.  To that end, one of Dell’s bankers at the time delivered a fairness opinion that assumed the Tracker would trade at a range of +/- 5% to VMware shares; while another banker assumed the Tracker would not trade at more than a 0-10% discount to VMware shares.[2]  Dell sold EMC stockholders the Tracker assuming, at most, no more than a 10% discount, yet today, Dell and some of those same bankers are now soliciting your vote to agree to exchange your DVMT shares at a 36% discount![3]

It seems clear that Dell has long-planned to repurchase the Tracker at bargain basement prices.  For two years, Dell management have publicly boasted about Dell’s “…opportunistic opportunities in the market to take advantage of the discount between the two securities”[4] and have repurchased over 23 million DVMT shares at substantial discounts.  This plan significantly benefits Michael Dell and Silver Lake, but at a huge cost to the DVMT stockholders.  Why hasn’t the Dell Board been exercising its fiduciary duties owed to the DVMT stockholders, as opposed to just the controlling stockholders?  Make no mistake, if the current “opportunistic” deal succeeds, 100% of the discount, approximately $11 billion, will be an economic windfall mostly attributable to Michael Dell and his Silver Lake partners.  It is clear to me that Dell and Silver Lake have followed Machiavelli’s advice to the letter:  It is better to be respected than loved, but better still to be feared than respected.

Creating the Fear

In January 2018, Dell commenced its fear campaign by telling stockholders that Dell was evaluating potential business combinations between Dell and VMware, Inc.  DVMT stockholders and the market generally feared that this meant a possible reverse-merger with VMware which would result in a significant multiple contraction for the combined companies which would mean a much lower combined company stock price for the former VMware stockholders.  This obviously would also result in a lower value for the DVMT stock.  For good reason, these disclosures sowed fear and uncertainty that resulted in a precipitous fall in price for both VMW shares and DVMT shares.  In a two-week period both stocks dropped over 25%.  It is very hard to believe that Michael Dell and Silver Lake did not fully anticipate this drop and we believe this was a carefully calculated (and successful) attempt to frighten VMW and DVMT stockholders.  It appears to us that VMW management and the VMW independent board members wanted no part of a merger with Dell.  Instead, they agreed to dividend $9 billion to Dell to obtain some relief from, and at least postpone, a merger with Dell.  Once the threat of a merger was effectively off the table, VMW and DVMT shares recovered a good part of their lost value and the discount narrowed modestly, but it continues to persist.

But, Michael Dell’s and Silver Lake’s ultimate objective was, and still is, to purchase the Tracker at a large discount and they would not be deterred.  They therefore successfully struck a deal with Dell’s independent directors to exchange DVMT shares for cash and Dell stock, at a ridiculously low valuation.  Instead of paying the mathematical value of $144 per share for the Tracker, they are currently offering to pay what we estimate is only $94 per share.[5]  Although I know and respect one of the Dell independent directors, by agreeing to this deal, I can only conclude the independent directors must have been misinformed by advisors working for Dell and Silver Lake or by Michael Dell and Silver Lake themselves.  Otherwise, it is unquestionable, in my opinion, that the independent directors breached their fiduciary duties to the DVMT stockholders.  How else can one explain an agreement that so obviously transfers $11 billion in value to the controlling stockholders at the expense of the minority stockholders?  The one thing these independent directors did get right, however, was to condition the deal on DVMT stockholder approval.  I believe the Dell independent directors must take their fiduciary duties to the DVMT stockholders seriously.  Any future transactions proposed by the controlling stockholders must always be assumed to be at the expense of the DVMT stockholders and the independent directors must always demand robust protections for the DVMT stockholders. The Board’s fiduciary duty to all stockholders demands nothing less, especially after this fiasco!

Dell now appears to be realizing that DVMT stockholders are uniformly and stubbornly against the proposed DVMT merger and is now moving into the next phase of its fear-mongering campaign.  By using the scare tactic of disclosing that they have met with investment bankers to explore a potential IPO of Dell’s Class C common stock, Dell is effectively telling its public stockholders that if we, the DVMT stockholders, do not approve their proposed DVMT merger, they will invoke a draconian provision in their Charter and force us to convert our DVMT shares into Dell stock following a Dell IPO.  Fortunately, in my opinion, their threat to “cram down” a forced IPO conversion is another empty one, if we stand together.  

An Empty and Ridiculous IPO Threat 

We believe that a Dell IPO would face significant challenges and trade very poorly given the possibility of the issuance of a tsunami of stock in connection with a forced conversion.  I believe Dell’s IPO valuation would be severely penalized with: 1) a larger than average IPO discount for its abominable corporate governance, 2) a conglomerate discount for the myriad of partially owned assets and complex structure and 3) a large and incalculable discount for the up to $20 billion of backflowing shares that could hit the market following a forced conversion of DVMT stock.  It would also be one of the most closely watched and scrutinized IPOs in history – the spotlight’s glare would be blinding!  In short, we are not intimidated by Dell’s threat of a forced IPO conversion, and ultimately, we ask ourselves: “Who would ever buy Dell stock knowing that a tsunami of stock may hit the market?” And, given these chaotic dynamics and uncertainties, as well my and other DVMT stockholders strong opposition to a forced IPO conversion, can you imagine the required disclosures or the roadshow?  Could you even find an investment bank willing to risk its reputation (not to mention the potential liability) with a Dell IPO under such circumstances?  

Even in the almost impossible event that Dell overcomes these massive execution challenges of the IPO “cram down,” we believe applicable law will suffocate Dell’s ability to achieve the draconian outcome they so desire.  The Delaware courts are clear that controlling stockholder transactions must be reviewed under the stringent entire fairness standard, not business judgment, unless certain procedural safeguards are satisfied.  If Dell invokes the forced IPO conversion, we believe the Board must treat such a transaction as a conflicted controlling stockholder transaction and obtain protections for the DVMT stockholders, otherwise the Board’s decisions will be reviewed under the entire fairness standard.  Particularly because a forced IPO conversion would result in irreparable harm to DVMT stockholders, we also believe that any transaction that fails to include minority stockholder safeguards will be exposed to an injunction and/or substantial damages.

Importantly, against the backdrop of DVMT stockholders rejecting the proposed DVMT merger transaction, it will be very difficult not to conclude that the forced IPO conversion was pursued in retaliation against DVMT stockholders. Given the fact that in one recent discussion, a very reputable stockholder told us that Goldman Sachs, one of Dell’s advisors, has been telling stockholders that (and I paraphrase) “…the IPO could be for a small number of shares and who knows how that will trade…”, Dell’s and Silver Lake’s current vote solicitation activities already appear to be tainted by coercion.  In my view, this is obviously another threat to take advantage of DVMT stockholders who do not understand that an IPO is nearly impossible!  Dell, Silver Lake and Goldman Sachs should all absolutely understand that Delaware jurisprudence has developed to protect minority stockholders from coercive controlling stockholders, and I strongly believe, as do my lawyers, that the Delaware courts will protect DVMT stockholders from Dell’s and Silver Lake’s coercive actions. Even if we fail to obtain an injunction, we believe we would have valid claims for substantial damages, which Dell would have to defend under entire fairness, for many years, which is not something either Dell or the Board will want to do.  Suffice it to say, we believe it is obvious that the threat of a forced IPO conversion is empty, no matter what they say.

Continuing the "Status Quo" - Another Empty Threat

Another threat Dell has made is that they will do nothing and will continue with the “status quo”.  But this is ridiculous!  Time is Dell’s enemy and our friend!  As time goes on, we expect Dell’s very cyclical business to be basically stagnant or to decline, while VMware’s business should continue to grow and become more profitable.  This dynamic will largely put our 50% economic ownership in VMware out of their reach.  We therefore believe that Dell purchasing the Tracker is a “must have” for Dell.  Today Dell, ex-VMware, is a mundane highly-levered hardware company that will only face greater disruption and competition.  The combination of high leverage and the cyclicality of Dell’s business means that it is possible that Dell’s cash flow may be severely impaired by any downturn in its business, making it very important for them to get control of VMware’s more stable recurring cash flow.  Dell has over $46 billion in gross debt, and its recent debt paydown has substantially relied on cash generation from asset sales and working capital, instead of operating income.  To continue paying down debt, we believe that Dell has a more pressing need for VMware’s cash flow than management would have you believe.

It is our strong opinion that capturing the discount is only the first step in Dell’s grand expropriation of value.  As astute technology investors, we believe that Michael Dell and Silver Lake perceive that VMware is right at the beginning of a multi-year inflection point.  As its fast-growing network and cloud solutions gain scale, we believe VMware is likely to experience the business nirvana of both accelerating growth and expanding margins.  We believe this could result in over $12 per share of free-cash flow generation in a few years, and a stock price of potentially over $250 per share.[6]  Clearly Michael Dell and Silver Lake take us for fools if they think that we would exchange this future value potential for only $94 per share.

THE Next Steps

We believe Dell’s next step will be to modestly increase the deal price in an attempt to receive voting commitments from those willing to sell at a discount, just not as large as the current 36% discount.  We strongly believe that DVMT stockholders should not consider accepting any discount, but if they do, in no event should that discount be greater than the 0 to 10% discount that was assumed when the DVMT Tracker was first issued.  Even then, note, I merely say “consider.”

Despite the numerous arguments I have made to explain why DVMT stockholders should not accept Dell’s proposed deal, or for that matter, even a new deal unless it contains a very, very substantial increase, I understand that some DVMT stockholders may want to exit their investment and accept an improved offer.  For that reason, and in preparation for the possible announcement of an improved offer, I am considering several options.  I believe that if Dell does raise the offer, it will be important to provide liquidity to the DVMT stockholders that want to sell, while also protecting the DVMT stockholders that do not want to sell from being forced out in a merger.  In my opinion the best way to balance these competing interests would be to offer a competing partial bid that provides partial liquidity without forcing a merger.  As such, I intend to continue evaluating this idea and determine whether other interested parties, including financing sources, may want to participate in, or finance, a transaction of this nature.

VOTE AGAINST THE PROPOSED DVMT MERGER!

In conclusion, I firmly believe Dell and Silver Lake are trying to capture $11 billion of value that rightly belongs to us, the DVMT stockholders.  As such, I intend to do everything in my power to STOP this proposed DVMT merger. In my opinion, it is better to have peace than war, but be assured, I still enjoy a good fight for the right reasons, and in the current situation, I do not see peace arriving quickly!  Stay tuned!

Sincerely,

Carl C. Icahn"



[1] Based on DVMT share price of $91.74 and VMware stock price of $141.49, as of October 11, 2018.  Assumes Class V Common Stock interest in 61.1% of the 331 million VMW shares attributable to the Class V Group, per Dell Technologies Inc.’s Form S-4/A, filed with the Securities and Exchange Commission, on October 4, 2018.

[2] As disclosed in the EMC Definitive Proxy Statement, dated June 6, 2016.

[3] Based on the value of 199 million outstanding DVMT shares, at $91.74 per share, compared to the value of 61.1% of Class V Group’s interest in 331 million VMware shares, at $141.29 per share.

[4] Dell Chief Financial Officer comments made during Dell’s earnings call on March 30, 2017.

[5] Based on a 5.0x multiple of FY2019E “Core Dell” EBITDA of $7 billion and market prices as of October 11, 2018 for VMware, Pivotal and SecureWorks. Assumes DVMT shares exchanged for $9 billion of cash and 1.3665 subject to proration.

[6] Cash flow projections based on Bank of America Merrill Lynch report, dated July 16, 2018.  FCF valuation multiple based on comparable company analysis, including MSFT, RHT and CTXS.

Carl Icahn Files 13D on Newell Brands

Carl Icahn has filed an amended 13D with the SEC regarding his stake in Newell Brands (NWL).  Per the filing, Icahn now owns 6.96% of the company with 33.79 million shares (including shares underlying forward contracts).  The filing notes they've now formed a group with Brett Icahn and include his ownership stake.

The forward contracts have a forward price of $23 per share and expiration of January 28th, 2020 and includes exposure to just over 3.01 million shares.  The rest of Carl Icahn's position is common stock.  Brett Icahn owns 500,000 NWL shares.

The filing notes that Icahn started buying on January 25th and was buying as recently as March 16th.

In a previous CNBC interview, Icahn noted that, "I believe Newell itself is undervalued and that's why I bought it."  He said he originally bought NWL around $25

We've highlighted previously that activist firm Starboard Value has also been involved in Newell Brands.

Carl Icahn Reveals Newell Brands Stake

Per an interview with CNBC today, activist investor Carl Icahn reveals he has taken a stake in Newell Brands (NWL).  "I believe Newell itself is undervalued and that's why I bought it" Icahn noted.

He says he bought NWL around $25 and has a less than 5% stake in the company, though Icahn feels he has one of the largest positions in the company.

Another activist investor, Jeff Smith's Starboard Value is also involved in the company and has joined Jarden executive Martin Franklin in trying to replace the entire board.

Newell merged with Jarden and the Starboard contingent feels that the Newell management team has not managed the integration well.  The company features prominent consumer brands such as Rubbermaid, Elmer's glue, and more.

NWL was featured in the investment thesis summary section of  the Q3 2017 issue of our Hedge Fund Wisdom newsletter if you're looking to catch-up on the company's background.

Carl Icahn's Herbalife Ownership Increases Due To Company Buyback

Activist investor Carl Icahn has filed an amended 13D regarding his position in Herbalife (HLF).  Per the filing, Icahn now owns 26.22% of the company.  This is up from his previous ownership stake of 24%, but it's not due to him buying more shares.  He still retains the same amount as he previously did: 22.87 million shares.

Herbalife recently announced results from its self-tender offer to buy around $600 million of its own stock.  It accepted over 6.73 million shares at $68 per share.

Sellers of stock received a contingent value right (CVR) for each share tendered that provides a right to payment should the company be taken private in the next two years.  After the tender completes, HLF will have around 87 million shares outstanding.

As a result, Icahn's ownership percentage increased without him doing anything.

And as we've highlighted previously,  Bill Ackman continues to be short Herbalife as well.

Per Google Finance, Herbalife Ltd. is "a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products. Its operating segments are based on geographical operations in six regions: North America; Mexico; South and Central America; Europe, the Middle East, and Africa (EMEA); Asia Pacific, and China. The Company categorizes its products into five groups: weight management, targeted nutrition, energy, sports and fitness, outer nutrition, and literature, promotional and other. As of December 31, 2016, it marketed and sold approximately 140 products encompassing over 4,700 stock keeping units (SKUs) globally. Its product categories include meal replacement; protein shakes; drink mixes; dietary and nutritional supplements containing herbs, vitamins, minerals and other natural ingredients; facial skin care; body care; hair care products; sales tools, and educational materials."

Carl Icahn Enters Forward Purchase Contracts on Herc Holdings, Adds to Freeport McMoRan Stake

Activist investor Carl Icahn has submitted a couple SEC filings recently.

Icahn Enters Forward Purchase Contracts on Herc Holdings

First, Icahn has filed a Form 4 with the SEC regarding shares of Herc Holdings (HRI), a spin-off from Hertz (HTZ).

Per the filing, Icahn has entered into forward purchase contracts on June 8th, 2017.  These contracts have a forward purchase price of $35.00 per share, plus a financing charge.  The contracts have expiration dates of June 7th, 2019.  Multiple contracts were entered via various investment vehicles Icahn controls and in total they represent 23,607 shares.

Per the company's website, Herc Holdings "previously were known as Hertz Equipment Rental Corporation or “HERC.”  We now operate in the U.S. under our new brand, Herc Rentals.  We generated revenue of $1.6 billion in 2016 and offer customers a diversified fleet of equipment valued at $3.6 billion1. We serve customers through 270 company-owned locations, primarily in North America, and have approximately 4,800 employees.  Through the years, we have been widely recognized as a pioneer and leader in the equipment rental industry, setting the standard for service and creating the performance metrics that are now commonplace for rental equipment companies."


Icahn Adds To Freeport McMoRan Stake

Second, Icahn has also filed an amended 13D with the SEC regarding his position in Freeport McMoRan (FCX).  Per the filing, Icahn now owns 6.33% of the company with over 91.58 million shares.

The filing notes that on June 6th, Icahn acquired 351,644 shares in total at $11.41 per share.

Per Google Finance, Freeport McMoRan is "a mining company. The Company operates through geographical assets with proven and probable reserves of copper, gold and molybdenum, and traded copper producer. The Company's segments include refined copper products, copper in concentrate, gold, molybdenum, oil and other. The Company's segments include the Morenci, Cerro Verde, Grasberg copper mines, the Rod & Refining operations and the United States (U.S.) Oil and Gas Operations. The Company has organized its operations into five divisions, which include North America copper mines, South America mining, Indonesia mining and Molybdenum mines. The Company's portfolio of assets includes the Grasberg minerals district in Indonesia, copper and gold deposits, and mining operations in the Americas, including the large-scale Morenci minerals district in North America and the Cerro Verde operation in South America."

Betting on Zero Trailer: Documentary on Bill Ackman's Fight Against Herbalife

Bill Ackman and Pershing Square's short bet against Herbalife (HLF) has been dragging on for quite some time now.  Simply put, he argues the company is a pyramid scheme.

Now, a documentary has been released called Betting on Zero.  It details Bill Ackman's 'holy war' against the company and also touches on Carl Icahn's long position. 

The documentary is available on iTunes now, but here's a teaser of what you can expect.

Embedded below is the video trailer for Betting on Zero:



For more on this fund, we've detailed Pershing Square's 2016 annual report.

Carl Icahn Buys More Herbalife & Navistar

Activist investor Carl Icahn has submitted two SEC filings regarding his positions. 

Icahn Buys More Herbalife

Icahn added to his Herbalife (HLF) position, per SEC filings.  In a 13D filing, Icahn disclosed he now owns 24.57% of HLF with over 22.87 million shares.

This means he purchased 372,324 shares at a price of $51.35 on March 10th per the 13D.

For more on this investor, we also highlighted how Icahn started a Bristol-Myers Squibb stake.

Per Google Finance, Herbalife is "a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products. The Company's segments include North America; Mexico; South & Central America; Europe, Middle East, and Africa (EMEA); Asia Pacific, and China. The Company markets and sells over 140 products, encompassing approximately 5,000 stock keeping units (SKUs) globally. Its product categories include Weight Management; Targeted Nutrition; Energy, Sports and Fitness; Outer Nutrition, and Literature, Promotional and Other. The Company's representative products include Formula 1 Healthy Meal, Herbal Tea Concentrate, Protein Drink Mix, Personalized Protein Powder, Total Control, Prolessa Duo, Protein Bars, Aloe Concentrate, Niteworks, Garden 7 phytonutrient supplement, Best Defense for improved immune system, COQ10 Plus and Herbalife SKIN line."


Icahn Adds To Navistar Position Too

Second,  Icahn now owns 17.02% of Navistar (NAV) with over 16.69 million shares, per a 13D filed with the SEC.

The filing notes Icahn bought 423,404 shares in total across March 8th, 9th, and 10th at prices of $25.47, $25.37, and $25.92.

Per Google Finance, Navistar is "a holding company whose principal operating entities are Navistar, Inc. and Navistar Financial Corporation (NFC). The Company's segments include Truck, Parts, Global Operations (collectively, Manufacturing operations) and Financial Services, which consists of NFC and its foreign finance operations (collectively, Financial Services operations). The Truck segment manufactures and distributes Class 4 through 8 trucks, buses and military vehicles under the International and IC Bus brands, along with production of engines. The Parts segment supports its brands of International commercial trucks, IC buses and engines. The Global Operations segment includes operations of its subsidiary, International Industria de Motores da America do Sul Ltda. (IIAA). The Financial Services segment provides and manages retail, wholesale and lease financing of products sold by the Truck and Parts segments and their dealers."

Carl Icahn Takes Bristol-Myers Squibb Stake

Activist investor Carl Icahn has taken a stake in Bristol-Myers Squibb (BMY) according to The Wall Street Journal.  He apparently sees it as a possible takeover candidate as well.

He's not the only activist involved now, either.  Barry Rosenstein's JANA Partners had been in talks with the company after becoming a shareholder in the fourth quarter of 2016.  As a result, the company added three new board members and also added to its share repurchase program.

Now, apparently Icahn has gotten involved as well.  If his past playbook is any indication, perhaps he pushes the company for a sale?  

You can view the rest of Carl Icahn's portfolio in our just released Hedge Fund Wisdom newsletter.

Per Google Finance, Bristol-Myers Squibb is "engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical products. The Company's pharmaceutical products include chemically synthesized drugs, or small molecules, and products produced from biological processes called biologics. Small molecule drugs are administered orally in the form of a pill or tablet. Biologics are administered to patients through injections or by infusion. It offers products for a range of therapeutic classes, which include virology, including human immunodeficiency virus (HIV) infection; oncology; immunoscience; cardiovascular, and neuroscience. Its late-stage investigational compounds that are in Phase III clinical trials include Beclabuvir, BMS-663068 and Prostvac."

Carl Icahn Buys More Hertz, Herbalife

Activist investor Carl Icahn has submitted a slew of filings to the SEC recently regarding his positions in Hertz Global Holdings (HTZ) and Herbalife (HLF). 

Also, in an interview with Bloomberg, he noted that he left Donald Trump's victory party to put about $1 billion to work betting on US equities as futures sold off sharply on the election news.  This comes only a few weeks after Icahn said companies were overvalued considering the risk premium.


Icahn Adds To Hertz Stake

Per an amended 13D, Icahn now owns 33.77% of Hertz with just over 28 million shares.  He bought on the recent sell-off on November 8th and in total purchased over 15 million shares at prices of $22.64 and $25.02.


Per Yahoo Finance, Hertz Global "engages in the car rental business in North America, Europe, Latin America, Asia, Australia, Africa, the Middle East, and New Zealand. It operates the Hertz, Dollar, Thrifty, and Firefly car rental brands in approximately 9,980 corporate and licensee locations"


Also Boosts Herbalife Holdings Again

We previously highlighted how Icahn recently bought $100 million worth of Herbalife shares.  And he's at it again, per a newly submitted 13D.  He now owns 24.18% of HLF with 22.5 million shares, up from the 21.44 million we previously reported on.  The filing was made due to activity on November 8th.

Per Google Finance, Herbalife is "a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products."

Carl Icahn Buys $100 Million Worth of Herbalife (HLF)

Activist investor Carl Icahn has filed a 13D and Form 4 with the SEC regarding his investment in Herbalife (HLF).  Per the filing, Icahn now owns 23.05% of HLF with over 21.44 million shares.

The filing notes that on November 3rd specifically, Icahn bought over 1.83 million HLF shares at a price of $54.7, or over $100 million worth of stock.

For more on this investor, last month we highlighted that Icahn said companies are overvalued considering the risk premium.

Per Google Finance, Herbalife is "a global nutrition company. The Company develops and sells weight management, healthy meals and snacks, sports and fitness, energy and targeted nutritional products, as well as personal care products. The Company's segments include North America; Mexico; South & Central America; Europe, Middle East, and Africa (EMEA); Asia Pacific, and China. The Company markets and sells over 140 products, encompassing approximately 5,000 stock keeping units (SKUs) globally. Its product categories include Weight Management; Targeted Nutrition; Energy, Sports and Fitness; Outer Nutrition, and Literature, Promotional and Other. The Company's representative products include Formula 1 Healthy Meal, Herbal Tea Concentrate, Protein Drink Mix, Personalized Protein Powder, Total Control, Prolessa Duo, Protein Bars, Aloe Concentrate, Niteworks, Garden 7 phytonutrient supplement, Best Defense for improved immune system, COQ10 Plus and Herbalife SKIN line."

Carl Icahn: Companies Overvalued Considering Risk Premium

Activist investor Carl Icahn made an appearance on CNBC yesterday to share his thoughts about the market.

He emphasized his stance that he's more and more concerned about the stock market.  He pointed to the fact that the middle class isn't seeing incomes they need, there's underfunded pensions, and rates are still too low.


Icahn said that, "A lot of S&P companies are way overvalued considering the risk premium"  He's having a hard time finding opportunities in this market but did note that some are "uniquely undervalued."

On Herbalife (HLF), Icahn continues to think that it's undervalued even after a big rally.  He reiterated that Bill Ackman (who is short HLF) is wrong about the stock and Icahn noted that HLF could still be "the mother of all short squeezes."

Icahn also noted: "If you want to be a successful investor, you look for things that are obvious but not apparent.  You have companies that there's some unique quality that aren't apparent that you buy.  Sometimes it takes years and years and years.  The activism is a catalyst for that obviously.  I think our portfolio is made up of those."

Embedded below are videos of Icahn's CNBC interview:

Video 1


Video 2



Video 3



You can view recent portfolio activity from Icahn here. And you can also check out David Tepper's interview here.

Carl Icahn Reduces Transocean Stake

Activist investor Carl Icahn has filed an amended 13D with the SEC regarding shares of Transocean (RIG).  Per the filing, Icahn now owns 1.5% of RIG with over 5.47 million shares.

This is way down from the previous 21.47 million shares he owned at the end of the second quarter.  The 13D notes that he was selling on September 23rd and 28th at prices of $9.92 and $9.26.

Icahn has been quite busy drastically reducing his energy exposure.  We highlighted how he also dumped over half of his Chesapeake Energy position recently as well.

Per Google Finance, Transocean is "an international provider of offshore contract drilling services for oil and gas wells. The Company's primary business is to contract its drilling rigs, related equipment and work crews primarily on a day rate basis to drill oil and gas wells. The Company operates through the contract drilling services segment. The Company specializes in technically demanding regions of the global offshore drilling business with a particular focus on deepwater and harsh environment drilling services. Its mobile offshore drilling fleet consists of floaters and high-specification jackups used in support of offshore drilling activities and offshore support services across the world. The Company owns or has partial ownership interests in and operates over 60 mobile offshore drilling , including approximately 30 ultra‑deepwater floaters, over seven harsh environment floaters, over five deepwater floaters, over 10 midwater floaters and approximately 10 high-specification jackups."

Carl Icahn Dumps Over Half of Chesapeake Energy Position

Activist investor Carl Icahn has filed an amended 13D with the SEC regarding his position in Chesapeake Energy (CHK).  Per the filing, Icahn now owns 4.55% of the company with 28.27 million CHK shares.

This means he sold over 44.77 million shares since the end of the second quarter as he previously owned over 73 million CHK shares.

Per the filing, he sold the bulk of the position on September 19th at prices of $7.06.

Icahn also issued this statement regarding Chesapeake:  "We believe that over the last few years Doug Lawler and his team have done an admirable job, especially in light of the circumstances. We reduced our position to recognize a capital loss for tax planning purposes."

For more on this investor, we recently posted up Icahn's talk at the Delivering Alpha conference.

Per Google Finance, Chesapeake Energy is "a producer of natural gas, oil and natural gas liquids (NGL) in the United States. The Company operates in two segments: Exploration and Production, and Marketing, Gathering and Compression. The exploration and production segment is responsible for finding and producing oil, natural gas and NGL. The marketing, gathering and compression segment is responsible for marketing, gathering and compression of oil, natural gas and NGL. It has positions in resource plays of the Eagle Ford Shale in South Texas; the Utica Shale in Ohio and Pennsylvania; the Anadarko Basin in northwestern Oklahoma and the Texas Panhandle, and the Niobrara Shale in the Powder River Basin in Wyoming. Its natural gas resource plays are the Haynesville/Bossier Shales in northwestern Louisiana and East Texas; the Marcellus Shale in the northern Appalachian Basin in Pennsylvania, and the Barnett Shale in the Fort Worth Basin of north-central Texas."

Carl Icahn Files 13D on Freeport McMoRan (FCX)

Activist investor Carl Icahn has filed an amended 13D with the SEC regarding his stake in Freeport McMoRan (FCX). The filing's main purpose was to send a statement from Icahn:

"This is a classic example of activists working constructively with an existing Board and management.  Since the Company announced the "Review of Strategic Alternatives" for its Oil & Gas business in October 2015 (not coincidentally the date of our arrival on the Board), the analyst community has heavily doubted the Company's ability to execute asset sales in this environment (particularly the Deepwater Gulf of Mexico assets along with all liabilities and potential future bonding obligations).  Yesterday's announcement demonstrates the Company is making good on its stated goal of deleveraging and is on track to cut its net debt by half, from year end 2015 through the end of next year, at current copper prices.  I applaud management and the whole Board of Directors for all steps taken in this regard.     

In light of the Company's recent initiatives, and as a large shareholder with two representatives on the Board of Directors, I completely endorse CEO Richard Adkerson's recent comments that Freeport is "…open for all strategic moves, whether that means selling assets, [or] selling the company" to create value for all shareholders."

For more on this investor, we just highlighted Icahn's talk at the Delivering Alpha conference yesterday.

Per Google Finance, Freeport McMoRan is "a natural resource company with a portfolio of mineral assets, and oil and natural gas resources. The Company's segments include the Morenci, Cerro Verde, Grasberg and Tenke Fungurume copper mines, the Rod & Refining operations and the U.S. Oil & Gas Operations. It has organized its operations into five primary divisions: North America copper mines, South America mining, Indonesia mining, Africa mining and Molybdenum mines. Its portfolio of assets includes the Grasberg minerals district in Indonesia, mining operations in North and South America, the Tenke Fungurume (Tenke) minerals district in the Democratic Republic of Congo (DRC) in Africa, and oil and natural gas assets in the United States. Its Atlantic Copper smelts and refines copper concentrates, and markets refined copper and precious metals in slimes. It has a smelter at its Miami, Arizona, mining operation, and molybdenum conversion facilities in the United States and Europe."

Carl Icahn Increases Hertz Position

Activist investor Carl Icahn has submitted some recent SEC filings regarding his position in Hertz (HTZ).  Per an amended 13D filing, Icahn now owns 15.24% of Hertz with over 64.69 million shares.

This means he's boosted his stake by just shy of 1 million shares.  The Form 4 Icahn filed with the SEC indicates he bought on June 2nd and 3rd at prices of $9.96 and $9.88.

For more on this investor, we recently highlighted how Icahn has taken a stake in Allergan.

Per Google Finance, Hertz is "engaged principally in the business of renting and leasing of cars through its Hertz, Dollar, Thrifty and Firefly brands, and equipment through its Hertz Equipment Rental brand. The Company operates through four segments: U.S. Car Rental, International Car Rental, Worldwide Equipment Rental and All Other Operations. It operates over 9,980 corporate and franchisee locations in North America, Europe, Latin America, Africa, Asia, Australia, the Middle East and New Zealand. Its brands maintain separate airport counters, reservations and reservation systems, marketing and all other customer contact activities. Its Hertz brand has approximately 8,510 corporate and franchisee locations in over 150 countries. Its Dollar and Thrifty brands combined have approximately 1,345 corporate and franchisee locations in over 75 countries and its Firefly brand has approximately 100 corporate and franchisee locations in over 20 countries.."

Carl Icahn Reveals Allergan Stake

Activist investor Carl Icahn today in a statement revealed he has taken a position in Allergan (AGN).  On his website, he writes:

"We have recently acquired a large position in Allergan and are very supportive of CEO Brent Saunders. We were instrumental in bringing Brent on board as the new CEO of Forest Labs a few years ago and worked cooperatively and constructively with him to help increase value for all Forest shareholders. Less than a year later Forest was acquired by Actavis (which subsequently merged with Allergan) resulting in massive gains for Forest shareholders. While we at that time disposed of our position in Forest, we still have always maintained great respect for Brent. We have every confidence in Brent’s ability to enhance value for all Allergan shareholders."

As our brand new Hedge Fund Wisdom issue detailed last week, AGN is a crowded hedge fund trade.  The company's merger with Pfizer (PFE) was called off after the US government implemented anti-inversion rules.  AGN has now basically become a capital deployment optionality story.

Carl Icahn Sells More Nuance Communications, Files 13D on Manitowoc Foodservice

Activist investor Carl Icahn has made a few more SEC filings as of late.

First, he has updated his position in Nuance Communications (NUAN).  We already highlighted how he trimmed his NUAN stake earlier this month and he has done so again.

A 13G filed with the SEC shows that Icahn now owns around 30 million shares of NUAN, or around 9.88% of the company.  This is down from the 34.4 million shares he owned recently.  The filing shows he sold shares on March 16th at a price of $19.00.  NUAN shares currently trade around $19.49.

Per Google Finance, Nuance Communications is "a provider of voice and language solutions for businesses and consumers across the world. The Company's solutions are used in healthcare, mobile, consumer, enterprise customer service, and imaging markets. The Company offers accuracy, natural language understanding capability, domain knowledge and implementation capabilities. The Company's solutions are based on the Company's voice and language platform and are used by businesses for tasks and services, such as requesting information from a phone-based self-service solution, dictating medical records, searching the mobile Web by voice, entering a destination into a navigation system, or working with portable document format (PDF) documents. The Company offers its solutions to its customers in a range of ways, including through products, hosting, professional services and maintenance and support. The Company operates in four segments: Healthcare, Mobile and Consumer, Enterprise, and Imaging." 


Icahn Files 13D on Manitowoc Foodservice

Secondly, Icahn has also filed with the SEC regarding shares of Manitowoc Foodservice (MFS).  Per the filing, Icahn now owns 7.73% of the company with over 10.58 million shares.  Icahn acquired these shares in connection with the company's separation from Manitowoc, a catalyst he pushed for. 

Icahn gets board representation on this new entity as part of a prior agreement.  The filing was made due to activity on March 4th.

Per Google Finance, Manitowoc Foodservice, Inc. is a commercial foodservice equipment company. The Company designs, manufactures and services an integrated portfolio of hot and cold category products. The Company supplies foodservice equipment to commercial and institutional foodservice operators, such as full-service restaurants, quick-service restaurant chains, hotels, caterers, supermarkets, convenience stores, business and industry, hospitals, schools and other institutions. The Company operates through three segments: Americas, EMEA and APAC. The Americas segment includes the United States, Canada and Latin America. The EMEA segment consists of Europe, Middle East and Africa, including the United Kingdom, the Nordic countries, Germany, France, Spain, Italy and Switzerland, as well as Egypt, South Africa and Dubai. The APAC segment consists of markets in China, Singapore, Australia, India, Malaysia, Indonesia, Thailand and the Philippines.

Carl Icahn Trims Stakes In Nuance Communications, Tegna & Mentor Graphics

Activist investor Carl Icahn has been busy lately, filing numerous portfolio disclosures with the SEC.  Here's a breakdown of his activity:

Trims Nuance Communications Stake

Per a Form 4 filed with the SEC, Icahn sold 26.3 million shares of Nuance Communications (NUAN) on March 9th at a price of $19.  After the sale, he still owns over 34.46 million shares of the company.  This means he still owns 11.32% of NUAN.

Per Google Finance, Nuance Communications is "a provider of voice and language solutions for businesses and consumers across the world. The Company's solutions are used in healthcare, mobile, consumer, enterprise customer service, and imaging markets. The Company offers accuracy, natural language understanding capability, domain knowledge and implementation capabilities. The Company's solutions are based on the Company's voice and language platform and are used by businesses for tasks and services, such as requesting information from a phone-based self-service solution, dictating medical records, searching the mobile Web by voice, entering a destination into a navigation system, or working with portable document format (PDF) documents. The Company offers its solutions to its customers in a range of ways, including through products, hosting, professional services and maintenance and support. The Company operates in four segments: Healthcare, Mobile and Consumer, Enterprise, and Imaging."


Reduces Tegna Exposure

Additionally, Icahn filed an amended 13D with the SEC regarding his stake in Tegna (TGNA).  Per the filing, he sold shares throughout early March at prices around $24.xx.  After selling around 2.07 million shares, Icahn still owns 4.88% of the company with over 10.7 million shares.

Per Google Finance, Tegna is "a media and marketing solutions company. The Company is engaged in providing local content on a range of platforms in the United States. The Company operates through Broadcasting and Digital segments. It also provides digital marketing services and Internet-based human resource solutions. Its digital media products and services include search, social media and Website development, among others. The Company offers its services in a range of geographies, demographics and content areas. The Company provides consumers with the information and entertainment, and connects consumers to their communities through various platforms, such as television stations, desktop, smartphone and tablet products. Its Broadcasting segment includes an independent station group of network affiliates. The Company's Digital business segment includes Cars.com, CareerBuilder and Shoplocal."


Sells Some Mentor Graphics

Lastly, the activist investor has sold some of his Mentor Graphics (MENT) position per a 13D filed with the SEC.  Icahn was selling shares on March 7th and 8th at prices of $19.46 and $19.54 and now owns 4.6% of the company with over 5.48 million shares.  This compares to his previous ownership of 16.1 million shares of MENT at the end of 2015.

Per Google Finance, Mentor Graphics is "a supplier of electronic design automation (EDA) tools - computer software and emulation hardware systems used to automate the design, analysis and testing of complex electro-mechanical systems, electronic hardware and embedded systems software in electronic systems and components. The Company's products are used in the design and development of a diverse set of electronic products, including automotive electronics, computers and workstations, digital cameras, cellular telephones, medical devices, smart phones, industrial electronics and manufacturing systems. The Company segregated revenues into five categories of similar products and services: Scalable Verification, IC Design to Silicon, Integrated System Design, New and Emerging Products, and Services and Other."

Carl Icahn Starts Xerox Position, Files 13D

Per a 13D filed with the SEC, activist investor Carl Icahn has disclosed a new stake in Xerox (XRX).  Per the filing, Icahn now owns 7.13% of the company with over 72.21 million shares.

The filing contains the standard activist boilerplate that he intends to have discussions with management.

Icahn purchased shares throughout October and November via a forward contract with expiry of July 20th, 2017 at prices between $9.63 and $10.66. 

Those prices contain a footnote that explains: "Represents a forward price of $8.00 per Share, plus the amount per Share the Reporting Person paid the counterparty to the forward contract or minus the amount per Share the Reporting Person received from the counterparty to the forward contract, as applicable, in each case upon entering into such forward contract.  The forward price is subject to adjustment to account for any dividends or other distributions declared by the Issuer. In addition, the Reporting Person will pay a financing charge to the counterparty to such forward contract."

For more on this investor, head to Carl Icahn's recent interview.

Per Google Finance, Xerox is "engaged in offering business process and document management solutions. The Company operates through the following segments: Services, Document Technology and Other. The Company's customers include small and midsize businesses (SMBs), graphic communications companies, Governmental entities, educational institutions and Fortune 1000 corporate accounts. The Company's Services segment provides two types of service offerings: Business Process Outsourcing (BPO) and Document Outsourcing (DO)."