Carl Icahn

Carl Celian Icahn was born on February 16, 1936, in Brooklyn, New York, into an Ashkenazi Jewish family and grew up in the Far Rockaway area of Queens. His father, a former cantor and later a substitute teacher, was a self-described atheist; his mother also worked as a teacher. After graduating from Far Rockaway High School, Icahn earned a B.A. in philosophy from Princeton University in 1957, writing a senior thesis on the empiricist criterion of meaning. He briefly attended New York University School of Medicine but left after two years to serve in the Army Reserve.

Icahn began his business career in 1961 as a stockbroker at Dreyfus Corporation. He later worked as an options manager at Tessel, Patrick & Co. and then at Gruntal & Co. In 1968, using $150,000 of his own money and a $400,000 loan from his uncle, he bought a New York Stock Exchange seat and founded Icahn & Co., focusing on risk arbitrage and options trading. His first takeover attempt came in 1978, when he took a controlling stake in Tappan and forced its sale to Electrolux, doubling his investment with a $2.7 million profit. He acquired Bayswater Realty & Capital Corporation in 1979, and in 1983 bought ACF Industries, selling those shares to Phillips Petroleum two years later for a $50 million gain.

In 1985, Icahn used a mix of his own funds, investor money, and bank loans to buy 50% of Trans World Airlines, completing a leveraged buyout in 1988. He then sold off TWA’s assets to repay debts—a practice called asset stripping—which earned him the label “corporate raider.” In 1991, he sold TWA’s London routes to American Airlines for $445 million, netting a $469 million profit while leaving the airline $540 million in debt. He also launched lowestfare.com to sell TWA tickets and acquired parts of Global Leisure Travel. That same year, he sold his stake in U.S. Steel for $1 billion, making a $200 million profit, after an unsuccessful $8 billion hostile bid for the company in 1986. In 1989, he sold his Texaco stake for $2 billion, profiting $700 million. He offered $375 million to acquire Pan Am in 1990, and later bid $43 million for the airline in 1998. In 1994, he took a 6.6% interest in Western Company of North America during its acquisition by BJ Services. He sold his 7.3% stake in RJR Nabisco in 1997 for a $125 million profit, and in 1998 led an investor group to push the company to split its tobacco and food units. In 1997, he took control of Marvel Comics in a rivalry with Ronald Perelman. In 2001, his firm Riverdale, LLC lent Genesisintermedia $100 million in exchange for options to buy 5.5 million shares at about $5.09 each. In 2004, he raised $3 billion to launch Icahn Partners, a hedge fund, and took stakes in Blockbuster Video and Time Warner. That same year, he bought a large block of Mylan stock to oppose its acquisition of King Pharmaceuticals, and Mylan abandoned the deal in early 2005.

In 2005, Icahn, as chairman and major shareholder of XO Communications, proposed buying its wired business for $700 million, using the proceeds to repay debt and buy back preferred stock from him. Minority shareholders blocked the deal in court in 2008, and Icahn was penalized for conflict of interest. In 2006, he bought stock in Take-Two Interactive, becoming its second-largest shareholder by 2009 with an 11.3% stake. In 2007, he purchased a 9.2% stake in Telik and 6.1 million shares of WCI Communities (later bought by Lennar). He lost a bid for a Motorola board seat in May 2007 despite owning 3% of the company. In February 2007, Lear Corporation’s board accepted a $2.3 billion offer from him.

Icahn is the founder and controlling shareholder of Icahn Enterprises, a publicly traded conglomerate based in Sunny Isles Beach, Florida. His strategy involves buying large stakes in companies he believes will gain value from policy changes, then pushing management to make those changes—a method that benefits shareholders and himself. He is considered one of the most successful hedge fund managers and investors in Wall Street history, and was an early activist shareholder who helped make that approach mainstream. In the 1980s, his hostile takeover and asset stripping of TWA cemented his reputation as a corporate raider. He appears on the Forbes 400 list, with a net worth estimated between $3.8 billion and $7 billion. Since 2011, he no longer manages money for outside clients, though investors can still put money into Icahn Enterprises.