Ackman vs Icahn: Battle of the Bloviating D-bags

Is that title really fair?   I dunno… I’m NOT a member of the Carl Icahn fanclub.  I’m also not a member of the Bill Ackman fanclub, and although I think he’s demonstrated a lot of hubris and overconfidence on Herbalife ($HLF – no positions), I’m not sure it’s fair to call him a douchebag just yet.   Anyway, these two hedge fund bigwigs have been having a public war of words (or was it a catfight?  They were actually fighting over WHO said he wanted to be the other guy’s friend and then denying those allegations…) over the past several days, which culminated this afternoon in this GOAT (greatest of all time) clip on CNBC, surpassing my previous all-time favorite from way back in the day when’s Patrick Byrne was on with Jeff Matthews talking about a Sith Lord manipulating his stock.  If only I had that video, I’d link it, but it’s been bumped to second place anyway by today’s Icahn-Ackman verbal brawl.

First, Ackman called in to talk about the recent spat with Icahn, which had resulted in Ackman publishing a press release regarding Icahn’s douche-tasticness.  That press release included the gem:

After Carl paid my investors, he called me up, congratulated me on winning, and said that he wanted to be my friend.  I told him that I had no interest in being his friend.

Here’s the video of Ackman’s call with CNBC – before Icahn calls in.  It’s not the juicy part, and I’d advise skipping below to the second video which has the War of Words with Icahn:

I’ll pull some select quotes:
In response to a question about Icahn saying that Ackman’s tactics were inappropriate:
“In 2002 and 2003, Carl Icahn spoke at the Ira Sohn Conference…and he talked about the same short idea both years… and he was short.. 22% of the outstanding shares”
“Carl did me a favor by picking on me yesterday as it’s another opportunity for people to focus on Herbalife”
then, after saying he thinks Dan Loeb is in Herbalife for a trade:
“I don’t wish Dan negative things, but if he stays long Herbalife, he will lose his entire investment. That is my prediction”
But let’s get to the good stuff, though, when Icahn calls in – here’s the video.  27 minutes of GLORY:

and the money quotes.  These are NOT made up.  I’ve done my best to transcribe these as accurately as possible – typing them down myself as I played the video back multiple times.  ellipses (…) indicate content that has been removed:


“I’ve really sorta had it with this guy Ackman…  Let’s start out with my history with this guy.  I was minding my own business and in 2003 I get a call from this Ackman guy, and I’m telling you he’s like the crybaby in the school yard.  Ya know I went to a tough school in Queens, and they used to beat up the little Jewish boys.  He was like one of these little Jewish boys crying that the world was taking advantage of him, he was almost sobbing… I called a friend who knew him, and my friend said “don’t deal with the guy, he’s major major trouble…”
“I got involved with this Ackman guy and it cost me money”
Scott Wapner:
“It cost you money because a court said you repeatedly reneged on the guy.”
Icahn then tells the story of Schmuck Insurance that’s in the Ackman press release linked below.  Ackman includes the actual legal agreement.  Icahn mumbles and bumbles some bullshit about something about the agreement, which Ackman already published online, concluding:
“He’s the quintessential example of when they say on Wall Street: if you want a friend, get a dog.”
Wapner tries to steer it back on track, and then gives Ackman a few words.  Ackman tells the story of MBIA and how Elliot Spitzer investigated him and found his conduct (another loud vocal short position) to be clean.  Ackman babbles for a few minutes, then talks about the deal with Icahn.
“Carl agreed to pay me $80 in cash – less than we could have gotten in the other deal… plus what he called “Schmuck insurance…. I was concerned about dealing with Carl Icahn because Carl Icahn unfortunately does not have a good reputation for being a handshake guy.”

Ackman then gives the details of their disputed transaction from 10 years ago.   Again, more details are in Ackman’s press release, which includes a link to the legal contract.

Ackman then says that after he sued Icahn, Icahn  said “i’m gonna sue you.”  At this point, you MUST be thinking of the classic Jerky Boys “punitive damages” clip:

Moving on:

“Icahn thought “this guy is roadkill on the hedge fund highway, I’m never gonna have to worry about this kid again, he’s not gonna have the resources to sue me, so I’m just not gonna pay him…”  I told Carl I would go to the end of the Earth to make sure he paid me – my investors – every penny he owed me with interest….I think this is not a great use of CNBC air time – I can tell you that this is not a great guy, this is not a guy who keeps his word, and it’s a guy who takes advantage of little people”

note: I don’t think Ackman was talking about the vertically challenged when he mentioned “little people.”

Wapner goes back to Icahn, asking him to come clean about his HLF position:

Icahn responds:

“I didn’t come on to be bulled by YOU! (talking to Wapner)… Listen to me… hello? can you hear me?  Well if you’re listening, let me talk… I’m not gonna talk about my Herbalife position ’cause you’re bullying me.”
“I’m not bullying you, I’m asking the question everyone wants to know”
I don’t give a damn what you want to know – I’m gonna talk about what I want to talk about, and if you want to take that position, I’ll never go on CNBC… So you can say what the hell you want, but I’m gonna talk about what Ackman just said about me, not about Herbalife…  I’ll talk about Herbalife when I Goddamn want to not when you ask me,  and I’m never going on a show with you again, that’s for damn sure!”
“Ackman is a liar… I lived my life.. by handshakes.  Ackman has one of the worst reputations on Wall Street…. He was doing bad in 2012 – he was down 2 or 3 percent. He probably woke up in the morning and said “let’s see what company we can destroy, put out a bear raid on”…  Ackman has done that, if you’ve read the articles about him, he’s done it all his life…  “
Icahn then says that he had a verbal agreement with Ackman that Ackman wasn’t gonna get any piece of the money from their prior deal – which is directly conflicted by the agreement which Ackman published.   Icahn makes excuses about the agreement being poorly written.
“Oh yeah, and when it comes to friends… he called me and said if we were friends we could make a lot of money together… But the guy takes inordinate risks”
Wapner interjects, which leads Icahn to blurt:
“let me just finish what the hell I want to say. You let him talk, now let me talk”
“you’ve been talking, you can continue”
“… He goes short 20% of the company.. this could be the mother of all short squeezes…  One day, if somebody tenders for the company, and wants all their stock back, what’s Ackman gonna do?  History repeats itself – he’ll be back where he was in 2003….I wouldn’t have an investment with Ackman if you paid me to do it – if ACKMAN paid me to do it… as far as I’m concerned, the guy is a major loser.   Disraeli once said.. “Young man, I’d be happy if I could be as sure of one thing in my life as you are sure of everything...”
“I will tell you that one day, I think H-A-L-F could be the mother of all short squeezes, that’s not me saying it… then he talks about charity – that’s complete BULLSHIT – he’s not givin’ it to charity, his limited partners aren’t giving it to charity”  (yes, he said H-A-L-F)…
“Pershing square was not having a bad year in 2012, and Herbalife did not double our returns… I think that Carl either has a very very bad memory, or he has trouble with the truth… just read the agreement – the agreement we put on the web.”
“The big issue with Carl Ichan is that he’s not used to someone standing up to him, and particularly a little guy like me, in 2003…”
“We take prudent risks at Pershing Square, we’re an un-levered fund.”
“I never said I want to be friends with you – I wouldn’t be friends with you… I wouldn’t invest with you if you were the last man on Earth.”
Wapner asks Ichan a question about his own criticism of Ackman’s short selling tactics:
“Hey listen, if I’m going to admit that I own stock, I’m not gonna admit it with a guy like you on TV because I don’t think you’re handling this fairly – I think you’re trying to attack me and bully me into admitting something…   I’d like to ask you a question: if you think you’re gonna bully me into it – you seem like a nice enough guy, I don’t think I’ve ever been on a show with you, but I don’t think I take to bullyin’. So do you think that you’re givin’ me all this bullshit – and Max Meyer said I can say what I want on this show, so I’m saying it…”
Wapner cuts him off, and they talk over each other for a bit… Wapner insists he’s not bullying Icahn and tries to get him to answer the question – if he’s long HLF.  Icahn says he’s gonna answer, but his answer is that that’s not why he came on.

Icahn then gets back to rambling about their deal from 10 years ago…  Then he cites Gretchen Mortgenson’s tale of Ackman’s Gotham Partners’ alleged pump & dump in PPD many years ago.

“I wouldn’t care if it was anyone but Ackman…classic stuff they did int he 90s – you scare the hell out of people, get the stock down, mark the stock on December 31st, and makes 600MM bucks on paper, and tells the world how great he is, he’s giving it to charity, shows the world he made 12% – which isn’t so great anyway.  I’d like to say, we made 28% last year without having to go pump and dump stocks and have rooms full of people.  In 2011, at the risk of being immodest, we made 33%, without having to do what I consider to be manipulation ok, and that’s what he did in Herbalife. And if it wasn’t Ackman, I wouldn’t give a .. I’m not here to change the world… A bunch of innocent investors, retirees are gonna lose their money so that Ackman can show a good record at the end of the year, and by the way took an inordinate risk… If there’s ever a short squeeze, which there well might be in Herbalife, what the hell does he do?  I’d like him to answer where does he get the stock  – when they call back all the stock: let’s say there’s a tender offer for Herbalife and they call back all the stock…  If you know Wall Street, when there’s a tender offer everybody calls back the stock you borrowed… that stock could rush to $100… ask him!”
This is an important point, and one I’ve discussed previously.  Icahn has experience orchestrating a massive short squeeze in GM via  a tender back in the day when there was a huge short position related to convertible bonds.   However, it’s perfectly possible for Ackman (the share borrower) to compensate his lender for shares without the lender tendering them: Ackman can pay for “nontenderable borrow” at a rate which would have to be negotiated based on the tender terms.
Ackman responds:
“Carl is free to make a tender offer for the company – Carl, you wanna bid for the company,go ahead and bid for the company.”
And Icahn flips out:
“Hey Hey – you don’t have to tell me what I’m free to do!”
Ackman then talks about how he doesn’t think the company is buyable, how no one can tender for it – but he is talking about the whole company and Icahn is talking about a partial tender to create a squeeze… Then:
“We shorted the stock, we have not covered our shares, and we have more to come by the way – we have questions that the company has given us the opportunity to ask, and we will have responses for every issue they raised in their responsive presentation to us…”
“I appreciate, Bill, that you called me a great investor – I thank you for that – unfortunately I can’t say the same for you.”
and Wapner ends it there…  but not before Icahn complains that he didn’t think Wapner appreciated him…

Phew.  A doozy.   Listen to this 27 minute clip, and stare in awe of the insanity of it all.

In my opinion, Icahn comes off as the classic bully, which is always ironic when he’s the one complaining that he’s being bullied.   As I noted in the beginning, I’m no Ackman fan, but Icahn is at the bottom of my list, and this interview only re-inforced that.


press release: Ackman Responds To Icahn’s Comments

Why Bill Ackman is Wrong About Herbalife

Another Million Pixels Killed Discussing Herbalife



Disclosure: no positions in $HLF

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