I Don’t Talk Positions But… I Might be Buying eBay – Icahn

In an interview with Bloomberg’s Trish Regan, activist investor Carl Icahn said “Peace is better than war” and that he came around to thinking PayPal is cheap and therefore there is “no rush to spin it off.” Icahn strongly hinted to Bloomberg’s Regan that he is buying eBay, “I really think this company’s greatly undervalued. I’ve said it about the other companies I’m in. So I believe Apple’s undervalued. I believe Herbal Life’s undervalued. So if you could ask me about three or four of them, yeah, I – I think this company is very undervalued. So ergo I don’t talk about positions, but I think you can deduce from that that I’m not going to be selling it. I might – in fact, I might be buying it.”

On Bill Ackman, Icahn said “I’m not mad at Ackman anymore. I made $300 million or $400 million because of Ackman.”


This text below has been automatically generated. It may not be 100% accurate.

Icahn on what made him change his mind on eBay:

“I’d look at these, all of them, that peace is better than war. If you look back, if you look at our record when we got on boards over the past five, six years, all you had to do was buy the stock and you did great and we got this confidentiality. We did terrific on all those. Just look at a few of them. On an annualized basis if you just bought the stock when we did the (inaudible) got on the board on. I’ve said that we believe that PayPal and eBay (EBAY) should eventually be separated. After talking to John and after looking at and studying this company, I really think there’s such a huge potential in PayPal right now that it’s almost a mistake to do it right now. I sort of agree because why – why should they sell stock of PayPal to the public now when you believe it’s going to increase dramatically over the next – next few years. And if you look at it, PayPal’s a bit of – I like to call them no brainers. You’re not always right, but it’s a little similar when we said Netflix was a no brainer at this – at this level because –”

On saying spinning off PayPal was a “no brainer” before:

“To begin with, we talked to a lot of shareholders over this period of time. And some of them are pretty intelligent guys. And some of these institutions have really – have lived with this company for a number of years. And a lot of them don’t want to see it split up for the following reason.”

“A few of them really have a real very strong feeling that at this point in time, why split it up? And they believe it’s sort of anti-intuitive to a short-term investor. And I want to make it clear we’re not short-term investors either. I’ve kept some seven years, eight years, 10 years. This is the new mantra of short termism. And the reason that they don’t want to do is they feel that PayPal will be taken away from them. In other words, some big acquirer will come in and even paying a premium they’re not interested. They say, hey look. This thing has got so much potential.”

“Why do it now? And I think that frankly I’m not speaking for John Donahoe, we’ve had some great conversations, but I think he also has that same thought that this company is – is really cheap now. And – and when you really dig into it, I came around to that thinking as opposed to saying, well, let’s – let’s spin it off and – and you don’t have to do it now. I believe the question is not if it’s going to be done but when. Frankly I don’t think I would have (inaudible) anyway. If you know you’re not going to win, why just fight the war just for the hell of fighting?”

On whether he knew he would not win because the institutional shareholders were not there:

I think that first of all you’ve got the chairman voting against us. That’s 8 percent. And a few of these large institutional shareholders, I’m not going to name who, have great belief in this company and the potential and I don’t think they would have voted for me in a precatory, not in a precatory. I might have won a seat on the board I wouldn’t have won the precatory anyway. So it’s easy to change your mind when you’re not going to win, and we wouldn’t have, not the precatory. I don’t – I want to make it clear. I don’t say I wouldn’t have won a seat on the board, but I don’t think – I say that strongly. I do not believe I could have won the precatory anyway, so it’s easy to change your mind on that. But I really did change my mind. I do think that the company will be spun off eventually. I still believe it should be, but I don’t think there’s a rush to do it.”

On whether he is going to stay in eBay until PayPal gets spun off:

“I don’t talk about my future commitments, but I do stay a long time in companies. And I really think this company’s greatly undervalued. I’ve said it about the other companies I’m in. So I believe Apple’s undervalued. I believe Herbal Life’s undervalued. So if you could ask me about three or four of them, yeah, I – I think this company is very undervalued. So ergo I don’t talk about positions, but I think you can deduce from that that I’m not going to be selling it.”

On David Dorman:

“Well here’s what happened. And I’ve said this before, but we – I was having a conversation with Jimmy Lee, who comes up occasionally to the office. We had it planned for a long time, so it wasn’t about this. Just talking about some other business.

And then he brought up the fact, he said, I don’t know why you guys are hiding (ph). Why – John’s a smart guy. You’re a smart guy. Why don’t you start talking? I said I’d love to talk, but Goldman never reached out to us. And you don’t like to make the first move in these things. And anyway, I wasn’t sure that John wanted to talk. So he – he said, let me call him. And – and he called up John who said, yeah, great. Let’s – let’s discuss this. And we came up with this idea that, okay, why don’t you put a third guy on?”

“You pick him and we’ll decide if we like him. And that appealed to me. Maybe I – I would win a seat. I thought I might win a seat, but – but it’s – but they agreed they would be a confidentiality, which is the thing I was talking about that we’ve had such great success with. And I mentioned Dave Dornan, who we had great relation with in Motorola. He as a chairman of Motorola and we I think saved the company. That’s my belief, by keeping them – by separating them. And so I think he’d be a great director, and they liked him. They said great.

“So I called – I called Dave and basically had a conversation, but basically he agreed. And he agreed that he’d be part of that confidentiality. But I do think that – frankly that John, with that confidentiality it means I’m sort of locked in. So I’m certainly not a short termer. We have to – you’ve got to only sell the stock very occasionally and only buy occasionally. And obviously you – in other words, you have all the restrictions of a board member.”

On whether Jimmy Lee was the one who changed his thinking of John Donahoe:

“Well Jimmy just said he was a good guy, but actually in taking to a lot of large shareholders, they were telling me that they thought John was a very effective guy. And John and I must have talked eight, 10 hours over the last four or five days about the company basically, the future, the potential. And I found him to be extremely passionate. That’s the kind of guy I like as the CEO. After talking to me.”

On whether Ebay board members fighting back influenced him:

“No. That had nothing to do with it. I will tell you what had to do with it. Look, I – I – first and foremost, I want to make money for IEP and I think this is the best way to do it. But I – I don’t think anything’s really changed dramatically as far as my feelings about this. I think it’s going – hopefully it will be split up. I can’t speak for John.”

On whether he will see Herbalife through:

Well, we actually went up to five board members just recently. So we are very involved with it. We’re involved with it because we like it. I’ve said all along I think Ackman’s completely wrong on this and that this company has – it’s under valued because of the multiple. And Herbal Life (HLF) gives jobs to people. It’s absurd what Ackman is saying. His whole thesis is completely wrong.

“Look, there are things there that he says that are sort of – that you find. There are some – there are some of these distributors that – that might be promising stuff, but that’s Herbal Life promising. And Herbal Life’s done a great deal to – to change that even where they could, where they can, where they go in and say that we don’t want you to sell leads and all that stuff. So there is stuff to that, but that doesn’t mean Herbal Life itself is not a very, very exciting company. It – it’s in a market that gives jobs. The opposite of what Ackman says. They give jobs to a lot of Hispanics. And I can’t even understand this arguments. You read it and read it and read it if you want to. I think I’m the only guy that actually bothered to read the first report. That made very little sense to me, the first one when he started… because Bill Ackman was short the stock and he may believe what he’s saying. I don’t know. As I said, I’m not mad at Ackman anymore. I made $300 million or $400 million because of Ackman.”

Video for viewing here.

Bloomberg Television

Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!

Be the first to comment

Leave a Reply

Your email address will not be published.


This site uses Akismet to reduce spam. Learn how your comment data is processed.