Carl Icahn
Carl Celian Icahn (born February 16, 1936) is an American businessman and investor who is the founder and controlling shareholder of Icahn Enterprises, a diversified conglomerate holding company based in Sunny Isles Beach, Florida. Widely regarded as one of the most successful activist shareholders and greatest investors on Wall Street, Icahn pioneered the activist investment strategy that became mainstream for hedge funds in the 1980s.
Icahn developed a reputation as a "corporate raider" after profiting from the hostile takeover and asset stripping of Trans World Airlines in the 1980s. His business model involves taking large stakes in companies he believes are undervalued, then pressuring management to make changes that benefit shareholders - through asset sales, management changes, stock buybacks, or spinning off divisions. Over his career, Icahn has targeted some of America's largest corporations including Apple, eBay, Netflix, Texaco, RJR Nabisco, and Phillips Petroleum.
With a net worth estimated between $5.1 billion and $7 billion in 2024, Icahn remains active in markets despite recent challenges including a damaging 2023 report by short-seller Hindenburg Research and a 2024 SEC settlement over disclosure violations.
Early life and education
Carl Celian Icahn was born on February 16, 1936, in Brooklyn, New York, to an Ashkenazi Jewish family. He was raised in the Far Rockaway neighborhood of Queens, which he later described as a tough, diverse area: "The neighborhood was black, Irish, Jewish, and those streets were mean."
His father, Michael Icahn, was a "sworn atheist" who worked as a cantor at the local synagogue despite having aspirations of becoming an opera singer. Michael Icahn was also a lawyer who "never made any money," according to his son. His mother, Bella (née Schnall), worked as a schoolteacher. Based on his humble upbringing and subsequent fortune, Icahn earned a perfect 10 on the Forbes 400 Self-Made Score.
Icahn attended Far Rockaway High School, where he was a strong student but faced skepticism about his college prospects. When applying to universities, his teachers told him: "Don't bother with the Ivy League. They don't take kids from this area." His parents agreed to pay for college only if he was accepted to Yale, Harvard, or Princeton, assuming they were safe from having to fulfill that promise.
Despite the doubters, Icahn applied to all three Ivy League schools and was accepted by every one. He became the first student from Far Rockaway High School to gain admission to Princeton University. His father paid the $750 annual tuition in the 1950s, but Icahn had to cover his own room, board, and expenses by working summer jobs at a cabana club in the Rockaways.
At Princeton, Icahn majored in philosophy and developed the analytical thinking skills that would later serve him in business. He graduated in 1957 with an A.B. In philosophy after completing a senior thesis titled "The Problem of Formulating an Adequate Explication of the Empiricist Criterion of Meaning," which earned him a school prize.
Icahn later explained how his philosophical training influenced his investment approach: "Empiricism says knowledge is based on observation and experience, not feelings. In a funny way, studying twentieth-century philosophy trains your mind for takeovers... There's a strategy behind everything. Everything fits. Thinking this way taught me to compete in many things, not only takeovers but chess and arbitrage."
After Princeton, Icahn enrolled at New York University School of Medicine but dropped out after two years to join the Army Reserve.
Career
Wall Street beginnings (1961-1968)
In 1961, Icahn began his career as a stockbroker at Dreyfus Corporation. Two years later, in 1963, he became an options manager at Tessel, Patrick & Co., then moved to Gruntal & Co., where he specialized in options trading and risk arbitrage.
During these years, Icahn developed expertise in options strategies and learned to identify undervalued companies ripe for restructuring - skills that would define his later career as an activist investor.
Icahn & Co. And early investments (1968-1978)
In 1968, Icahn founded his own securities firm, Icahn & Co., with $150,000 of his own money and a $400,000 investment from his uncle. The firm focused on risk arbitrage and options trading.
Through the 1970s, Icahn refined his investment approach, learning to identify companies trading below the value of their assets. He began accumulating stakes in undervalued companies and pressuring management for changes - the early form of what would become activist investing.
The corporate raider era (1978-1990s)
Icahn became a household name in the 1980s as one of the most feared "corporate raiders" on Wall Street. His approach was straightforward but controversial: buy a significant stake in a company, demand changes that would unlock shareholder value, and either force a restructuring or sell the stake at a profit when the company bought him out (a practice known as "greenmail").
Trans World Airlines
Icahn's most notorious deal was his takeover of Trans World Airlines (TWA). In 1985, by pooling his personal funds with investor capital and bank borrowings, Icahn acquired 50% of the airline. He completed a used buyout in 1988, taking the company private.
Icahn then systematically sold TWA's assets to repay his debt, a practice critics called "asset stripping." Most notably, he sold TWA's prized London routes to American Airlines for $445 million, generating profit for himself while saddling TWA with $540 million in debt. The airline filed for bankruptcy in 1992 and eventually ceased operations in 2001.
The TWA deal made Icahn rich and infamous, cementing his reputation as a ruthless corporate raider who prioritized short-term profits over long-term company health.
Other 1980s deals
During the 1980s, Icahn was involved in numerous high-profile corporate battles:
- Texaco - Icahn accumulated a stake and pressured the oil giant during its bankruptcy proceedings
- Phillips Petroleum - Participated in the takeover battle in 1985
- USX - Took a large position in the steel and energy company
- RJR Nabisco - Involved in the famous used buyout battle chronicled in "Barbarians at the Gate"
Activist investing (2000s-present)
In the 2000s, Icahn transitioned from corporate raider to activist investor, though his fundamental approach remained similar: take stakes in companies and pressure management for changes benefiting shareholders.
Apple campaign (2013-2016)
One of Icahn's most prominent activist campaigns targeted Apple Inc. In August 2013, Icahn announced via Twitter that he had taken a "large position" in Apple, initially worth over $1 billion.
Icahn engaged directly with Apple CEO Tim Cook, writing open letters and dining with Cook to discuss his proposals. He pushed for a massive $150 billion stock buyback, calling Apple "undervalued" and the buyback a "no brainer." He wrote to Cook: "From our perspective, Apple is the world's greatest consumer product innovator and has one of the strongest and most respected brand names in history."
By October 2013, Icahn had increased his stake to 4.7 million shares worth $2.5 billion. He eventually reduced his buyback request to $50 billion, and Apple's board approved a $30 billion buyback program in April 2014. Icahn sold his entire Apple stake in 2016, reporting a profit of approximately $2 billion.
Other notable investments
Icahn's activist campaigns have targeted numerous other major corporations:
- eBay - Pushed for a spinoff of PayPal (successfully completed in 2015)
- Netflix - Accumulated shares and sold for substantial profit
- Herbalife - Took a position opposing Bill Ackman's famous short position
- Dell - Opposed Michael Dell's 2013 used buyout
- Xerox - Pushed for merger with Fujifilm (later abandoned)
Icahn Enterprises
Icahn Enterprises L.P. (NASDAQ: IEP) is Icahn's publicly traded holding company, which owns stakes in various businesses across energy, automotive, food packaging, real estate, and other sectors. Icahn serves as chairman and controlling shareholder.
Controversies
Hindenburg Research report (2023)
In May 2023, short-seller Hindenburg Research published a damaging report alleging that Icahn Enterprises overvalued its holdings and relied on a "Ponzi-like" structure to pay dividends. Hindenburg claimed that IEP paid dividends funded by selling new stock to investors rather than from investment returns.
The report devastated Icahn's net worth. IEP shares dropped 20% immediately following publication, erasing $3.1 billion. Combined with Bloomberg's adjustment for Icahn's margin loans, his net worth fell more than $10 billion. IEP stock, which traded around $50 before the report, collapsed to under $16 and has not recovered.
Icahn vigorously disputed Hindenburg's allegations, accusing the short-seller of publishing "scurrilous and unsupported allegations" to profit from their short position.
SEC settlement (2024)
In August 2024, the Securities and Exchange Commission charged Icahn and Icahn Enterprises with failing to disclose billions of dollars in personal margin loans that were backed by Icahn's IEP stock.
According to the SEC, Icahn pledged anywhere from 51% to 82% of IEP shares outstanding to secure margin loans worth up to $5 billion without disclosing this fact to shareholders or federal regulators as required by securities law.
Icahn Enterprises agreed to pay $1.5 million and Carl Icahn personally paid $500,000 to settle the civil charges - a total of $2 million - without admitting or denying wrongdoing. The $500,000 personal fine represented approximately 0.01% of Icahn's net worth.
Notably, the SEC found no evidence to support Hindenburg's more serious allegations about fraud, inflated valuations, or improper dividend practices. Icahn pointed out: "The government found absolutely no fraud and did not find any inflation of IEP's NAV or impropriety in its dividends."
Hindenburg responded by reiterating that IEP was "still operating a ponzi-like structure" and maintained its short position.
Personal life
First marriage: Liba Trejbal
In 1979, Carl Icahn married Liba Trejbal, a Czech ballerina. The couple had two children together:
- Brett Icahn (born August 1979) - Works as an investor and portfolio manager at Icahn Enterprises
- Michelle Celia Icahn Nevin (born 1982) - Attended Choate Rosemary Hall, previously worked as a schoolteacher, now works at Icahn Enterprises
Carl and Liba separated in 1993 and divorced in 1999 after years of contentious litigation. Liba sought to nullify a prenuptial agreement she had signed while pregnant, claiming she signed under duress. She refused Icahn's offer of $1.5 million annually, given that his net worth was in the billions. The couple eventually settled for an undisclosed amount.
Second marriage: Gail Golden
In 1999, Icahn married Gail Golden, his longtime assistant and former broker. Golden, born in 1949, is approximately 14 years younger than Icahn. She had been previously married and has two children from that marriage: Christie and Shana Golden.
After marrying Icahn, Gail became vice president of Icahn Enterprises. She is also the founder of Gutsy Women Travel, a luxury travel company for women traveling without their husbands.
Carl and Gail do not have children together.
Residences
Icahn and his wife Gail reside primarily in Sunny Isles Beach, Florida, where Icahn Enterprises is headquartered. The couple also maintains properties in New York.
Investment philosophy
Icahn's investment approach centers on several core principles:
- Undervalued assets: Target companies trading below the value of their underlying assets
- Activist engagement: Use shareholder position to pressure management for changes
- Structural improvements: Push for stock buybacks, spinoffs, management changes, or asset sales
- Concentrated positions: Take large enough stakes to influence corporate decisions
- Patience and persistence: Willing to wage multi-year campaigns to achieve objectives
In interviews, Icahn has emphasized the importance of conviction and independence: "Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity."
Legacy
Carl Icahn is credited with legitimizing activist investing as a mainstream strategy. While his 1980s corporate raids attracted criticism for short-termism and job losses, his later activism helped establish the principle that shareholders have the right - and sometimes the obligation - to hold management accountable.
The "Icahn Lift" - the phenomenon of stocks rising when Icahn discloses a position - reflects his reputation as a value-finder capable of unlocking shareholder value through activist pressure.
See also
References