5 ms·

For others: it's legal, and it's basically all Icahn does - he's probably the most famous corporate raider. He obtains a minority stake in a company, gets a sea

For others: it's legal, and it's basically all Icahn does - he's probably the most famous corporate raider. He obtains a minority stake in a company, gets a seat or two on the board, bullies the management into taking on tremendous amounts of debt, and uses the cash to pay himself and the other investors, calling it "unlocking value for shareholders." The once-healthy company is eventually sucked dry and he moves on to his next target.

oh_sigh 6y ago
It doesn't really make sense to me who loans companies money in these circumstances. Aren't they the ones always left holding the bag?
- echelon 6y ago
  Yes and no. They're the first parties in line to pick apart bankrupt companies. The stockholders are the ones left out in the cold.
  - oh_sigh 6y ago
    Same question then...when Icahn or others of his ilk get their claws into a board, why don't rational investors flee like the dickens?
  - simonh 6y ago
    But Icahn is a stock holder too, just sell when he does. It seems like the debt lenders will just be left with a few stripped bones to chew on.
- Gibbon1 6y ago
  Couple of things going on. There are a lot of institutional investors where fiduciaries have no skin in the game and are being corrupted via a soft bribery. Central banks have flooded the world with cheap capital. And you have system where stockholders that end up holding the bag (AKA you and your 401k) don't have voting rights.
valuearb 6y ago
It’s called fraudulent conveyance.
cosmodisk 6y ago
Corporate raiding was popular in 80s,but since then many methods were created to defend companies from such activities.For a minority shareholder to get a board seat is doable, however to bully the entire board into dancing, requires weak donkeys.If the CEO cares more about his own job than the company he's supposed to run,then it's quite easy for the like of Icahn to do whatever they want to. Having said that,I've got a feeling that he's mostly after vulnerable companies that can be influenced for one reason or another.
cryptica 6y ago
Seems like a blatant conflict of interest and misappropriation of company funds. He not only stole from the Hertz and from the bank, but he also stole from every US citizen because that credit was printed out of thin air by the bank when it was loaned to Hertz... The creation of this debt diluted the value of the dollar for every citizen of the US... Then that credit went to Icahn while he knew perfectly well that he was running this company straight into the ground. This is definitely fraud.
verucanacl 6y ago
you fool - icahn is a shareholder with mostly his own fortune
sangnoir 6y ago
Timely Onion article: Protestors Criticized For Looting Businesses Without Forming Private Equity Firm First[1] 1. https://www.theonion.com/protestors-criticized-for-looting-businesses-without-fo-1843735351 https://www.theonion.com/protestors-criticized-for-looting-b...

oh_sigh 6y ago

It doesn't really make sense to me who loans companies money in these circumstances. Aren't they the ones always left holding the bag?

echelon 6y ago
Yes and no. They're the first parties in line to pick apart bankrupt companies. The stockholders are the ones left out in the cold.
- oh_sigh 6y ago
  Same question then...when Icahn or others of his ilk get their claws into a board, why don't rational investors flee like the dickens?
- simonh 6y ago
  But Icahn is a stock holder too, just sell when he does. It seems like the debt lenders will just be left with a few stripped bones to chew on.
Gibbon1 6y ago
Couple of things going on. There are a lot of institutional investors where fiduciaries have no skin in the game and are being corrupted via a soft bribery. Central banks have flooded the world with cheap capital. And you have system where stockholders that end up holding the bag (AKA you and your 401k) don't have voting rights.

valuearb 6y ago

It’s called fraudulent conveyance.

cosmodisk 6y ago

Corporate raiding was popular in 80s,but since then many methods were created to defend companies from such activities.For a minority shareholder to get a board seat is doable, however to bully the entire board into dancing, requires weak donkeys.If the CEO cares more about his own job than the company he's supposed to run,then it's quite easy for the like of Icahn to do whatever they want to. Having said that,I've got a feeling that he's mostly after vulnerable companies that can be influenced for one reason or another.

cryptica 6y ago

Seems like a blatant conflict of interest and misappropriation of company funds. He not only stole from the Hertz and from the bank, but he also stole from every US citizen because that credit was printed out of thin air by the bank when it was loaned to Hertz... The creation of this debt diluted the value of the dollar for every citizen of the US... Then that credit went to Icahn while he knew perfectly well that he was running this company straight into the ground. This is definitely fraud.

verucanacl 6y ago

you fool - icahn is a shareholder with mostly his own fortune

sangnoir 6y ago

Timely Onion article: Protestors Criticized For Looting Businesses Without Forming Private Equity Firm First[1] 1. https://www.theonion.com/protestors-criticized-for-looting-businesses-without-fo-1843735351 https://www.theonion.com/protestors-criticized-for-looting-b...