| WHEN: TODAY, FRIDAY, JANUARY 25TH WHERE: CNBC'S "FAST MONEY HALFTIME REPORT" Following is the unofficial transcript of investors Bill Ackman and Carl Icahn going head-to-head on CNBC's "Fast Money Halftime Report" today. Following is a link to the video of the interview on CNBC.com: http://video.cnbc.com/gallery/?play=1&video=3000143591. All references must be sourced to CNBC. |
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| WAPNER: THE WAR OF WORDS BETWEEN TWO HEDGE FUND HEAVY WEIGHTS IS HEATING UP WITH CARL ICAHN BASHING BILL ACKMAN OVER HIS SHORT POSITION IN HERBALIFE, AMONG OTHER THINGS. ACKMAN JOINS US NOW LIVE ON THE PHONE TO RESPOND TO THOSE ACCUSATIONS. THANKS FOR COMING ON, BILL. IT'S GOOD TO TALK TO YOU. ACKMAN: SURE, THANKS FOR HAVING ME. WAPNER: JUST TO LET EVERYBODY KNOW, THIS A FEUD BETWEEN YOU GUYS THAT GOES BACK ABOUT TEN YEARS. A FEUD THAT YOU ULTIMATELY WON IN COURT. LET THE RECORD SHOW THAT BUT I THINK IT'S BEST, LET'S NOT FOCUS ON THE PAST. LET'S TRY TO MOVE THE ARGUMENT FORWARD HERE. THE FUNDAMENTAL ONE THAT MR. ICAHN SEEMS TO BE MAKING AGAINST YOU THAT YOU WERE TOO AGGRESSIVE, TOO PUBLIC IN THE WAY THAT YOU ATTACKED HERBALIFE IN ANNOUNCING YOUR SHORT POSITION TO THE WORLD. WHAT WOULD YOU SAY TO THAT? ACKMAN: DO YOU KNOW WHAT'S FASCINATING ABOUT IT IS IN 2002 AND 2003 CARL ICAHN SPOKE AT THE IRA SOHN CONFERENCE AND IN FACT I REVEALED OUR HERBALIFE SHORT AT THE IRA SOHN CONFERENCE'S SPECIAL EVENT THAT THEY HELD ON DECEMBER 20. WELL CARL WAS THE SPEAKER IN 2002 AND 2003 AND TALKED ABOUT THE SAME SHORT IDEA BOTH YEARS. TRINITY INDUSTRIES AND HE WAS SHORT ACCORDING TO A FORTUNE STORY I JUST PULLED UP, 22% OF THE OUTSTANDING SHARES. I WAS THERE PERSONALLY AND REMEMBER HIM TALKING ABOUT THE SHORT AND HE GAVE A GREAT STORY ABOUT WHY HE WAS SHORT. THERE WAS A ROOM FULL OF PEOPLE, IT WAS THE SAME CONFERENCE SPONSORS SO I FIND IT INTERESTING OUR SPEAKING AT THE IRA SOHN CONFERENCE IN 2012 IS SOMEHOW A BAD THING BUT HIS SPEAKING AT THE IRA SOHN CONFERENCE IN 2002 AND 2003 ACTUALLY WAS SHORT BOTH CONSECO IF YOU REMEMBER THAT AND TRINITY INDUSTRIES. HE TALKED ABOUT BOTH IDEAS, SAME FORMAT, SAME APPROACH. SIMILAR PERCENTAGE OF THE SHARES OUTSTANDING. ACTUALLY HE WAS SHORT 22% OF THE TRINITY INDUSTRY SHARES IF YOU BELIEVE THE FORTUNE STORY I JUST PULLED UP ON MY GOOGLE SEARCH. WAPNER: IS THERE A DIFFERENCE IN SORT OF THE NATURE AT WHICH YOU HAVE GONE AT HERBALIFE AND SIMPLY ANNOUNCING A SHORT POSITION AT A CONFERENCE AND MAKING IT AS PUBLIC AS YOU HAVE MADE IT, RESPONDING TO OTHER PEOPLE WHO MAY BE ON EITHER SIDE OF THE POSITION? I KNOW YOU KNOW WHO I'M REFERRING TO WHICH WE'LL GET INTO IT IN A MOMENT. IS THERE A DIFFERENCE? ACKMAN: NO. I THINK OUR GOAL HERE WAS TO SHINE A SPOTLIGHT ON HERBALIFE. WE BELIEVE THIS IS A COMPANY CAUSING ENORMOUS HARM TO MILLIONS OF PEOPLE AND HAS DONE SO OVER A LONG PERIOD OF TIME. AND THAT IT DESERVES THE HIGHEST LEVEL OF SCRUTINY AND WHILE I THINK FRANKLY IT IS A SIDE SHOW WHO'S LONG THE STOCK, WHO'S SHORT THE STOCK. IT DOES MAKE FOR SOME FUN MEDIA CONVERSATIONS. THE GOOD NEWS ABOUT THAT IS THE PRESS WROTE SOME FUN PIECES ON BILL ACKMAN VERSUS DAN LOEB OR BILL ACKMAN VERSUS CARL ICAHN, WHATEVER YOU CALL IT. BUT PEOPLE NOW WHAT TO YOU KNOW THE READERS, YOUR VIEWERS WANT TO KNOW WHO'S RIGHT. THAT'S CAUSED THE PRESS TO START DIGGING INTO THE STORY, START VISITING NUTRITION CLUBS, START LOOKING AT INTERVIEWING DISTRIBUTORS AND THAT WAS REALLY ULTIMATELY OUR GOAL. OUR GOAL WAS TO SHED THE TRUTH ABOUT THE COMPANY AND BY GIVING A PRESENTATION AT THE IRA SOHN CONFERENCE AND HAVING 500 PEOPLE IN THE ROOM, 1300 PEOPLE ON THE WEB CAST AND PUTTING OUT THE WEBSITE, FACTS ABOUT HERBALIFE AND FRANKLY CARL DID ME A FAVOR BY PICKING ON ME YESTERDAY. I GUESS ANOTHER OPPORTUNITY FOR PEOPLE TO REALIZE AND TO FOCUS ON HERBALIFE AND I DO THINK THAT'S REALLY THE STORY. WAPNER: LET'S GO TO THE ISSUE AT LARGE THOUGH ABOUT SHORT SELLING'S ROLE IN THE MARKET. WHETHER IT'S GOOD, BAD, DESTRUCTIVE OR ANYTHING ELSE. THE POINT CARL ICAHN MADE YESTERDAY, HERE IS A STATEMENT FROM HIM IN HIS APPEARANCE YESTERDAY, IF YOU SHORT YOU GO SHORT AND HEY IF IT GOES DOWN YOU MAKE MONEY. YOU DON'T GO OUT AND GET A ROOM FULL PEOPLE TO BAD MOUTH THE COMPANY. HE'S NOT THE ONLY ONE THAT MAKES THE ARGUMENT THAT SHORT SELLING CAN BE DESTRUCTIVE TO THE MARKET. THAT WHEN A STOCK GOES DOWN WHEN SOMEONE OF YOUR CALIBER, WHEN SOMEONE WHO CARRIES THE WEIGHT YOU DO, GOES PUBLIC AGAINST THAT POSITION THE VELOCITY OF A MOVE TO THE DOWN SIDE CAN CERTAINLY BE DRAMATIC. WOULD YOU ADMIT THAT? ACKMAN: NO. I THINK IT'S A WONDERFUL THING FOR THE MARKET. LOOK, IT'S UNFORTUNATE IF SOMEONE OWNED THE STOCK AND IT WENT DOWN AND THEY LOST MONEY. THAT'S AN UNFORTUNATE CONSEQUENCE, BUT FRANKLY IF THEY GOT OUT AT A PRICE HIGHER THAN ZERO THEY WILL ULTIMATELY BE BETTER OFF. WE BELIEVE -- FIRST OF ALL LET'S JUST TALK ABOUT SHORT SELLING'S ROLE IN THE MARKET. YOU KNOW THE HOUSING MARKET WAS REALLY THE ONLY MARKET IN THE COUNTRY WHERE YOU COULDN'T GO SHORT AND WHAT HAPPENED IS AN ENORMOUS BUBBLE DEVELOPED IN THE MARKET. IF YOU HAD A MARKET IN WHICH PEOPLE COULDN'T GO SHORT, YOU WOULD HAVE A LOT MORE MARKET CRASHES. GOOD THING ABOUT SHORTS IS THEY SORT OF MOLLIFY THE UPSIDE AND THEY ALSO CUSHION THE DOWN SIDE BECAUSE THE PEOPLE WHO COVER WHEN A STOCK CRASHES ARE GENERALLY SHORT SELLERS SO THEY SORT OF MITIGATE SOME OF THE EXTREME MOVEMENTS IN THE MARKET. BUT I THINK THEY PLAY A MUCH MORE IMPORTANT ROLE. YOU LOOK AT A GUY LIKE JIM CHANOS AND YOU KNOW EARLY ON IN ENRON UNFORTUNATELY IT'S NOT-- THE REGULATORS ARE USUALLY NOT THE FIRST TO IDENTIFY FRAUD. IT'S USUALLY AN INVESTOR WHO'S COMBING THE MARKET AND SPENDING THE TIME AND DIGGING INTO 10-K'S AND 10-Q'S AND HAS THE RESOURCES TO DO THE RESEARCH THAT'S REQUIRED. WE SPENT 18 MONTHS ON HERBALIFE VERY INTENSIVELY THE LAST YEAR STUDYING THE COMPANY AND YOU KNOW, EVEN IF YOU'RE A REGULATOR YOU CAN'T DEVOTE YOUR TEAM'S RESOURCES TO ONE INVESTMENT IDEA. AND WE PUT AN ENORMOUS AMOUNT OF BOTH INTERNAL AND EXTERNAL RESOURCES ON THE COMPANY AND WE SHARED WHAT WE LEARNED WITH THE PUBLIC. WAPNER: LET ME ASK YOU ARE YOU AND LOEB FRIENDS, ENEMIES, FRENEMIES? WHAT'S THE DEAL? WHAT'S THE DEAL? ACKMAN: YOU KNOW, I DON'T KNOW. SO DAN, I HAVE HAD A RELATIONSHIP WITH LARGELY THROUGH THE BUSINESS. OVER TIME WE HAVE GOTTEN ALONG PERFECTLY, REASONABLY WELL. AND THAT'S HOW I WOULD CHARACTERIZE IT. I WOULDN'T SAY WE ARE PARTICULARLY CLOSE FRIENDS, BUT CERTAINLY SOMEONE I KNEW IN THE BUSINESS. WAPNER: ARE YOU DISAPPOINTED IN THE ROLE HE'S TAKEN WITH HERBALIFE? I MEAN HE CALLED YOUR ACCUSATIONS AGAINST THE COMPANY PREPOSTEROUS AND SAID THE COMPANY IS WELL MANAGED. YOU GUYS COULDN'T BE ON MORE OPPOSITE SIDES OF THE ARGUMENT AS IT PERTAINS TO HERBALIFE. WELL, I THINK IT'S A WELL MANAGED PYRAMID SCHEME. I AGREE WITH THAT. I FRANKLY THINK DAN IS IN IT FOR A TRADE. I DON'T THINK HE'S GOING TO BE A LONG-TERM OWNER OF THE STOCK. I DON'T THINK HE BELIEVES THIS IS A GREAT BUSINESS. I READ A STORY RECENTLY AND I'VE HEARD THROUGH THE HEDGE FUND GRAPEVINE DAN IS SHORT NU SKIN, ACCORDING TO AN ARTICLE AND HE'S NOT DENIED IT. NU-SKIN'S BUSINESS WAS FOUNDED 28 YEARS AGO. NU SKIN IT SELLS NUTRITIONAL SUPPLEMENTS AND SKIN CARE PRODUCTS. NU-SKIN HAS GREAT ECONOMIC AND FUNDAMENTALS IN TERMS OF REPORTED EARNINGS AND CASH FLOWS AND REVENUES. IT'S BEEN ACCUSED OF BEING A PYRAMID SCHEME. WE HAVEN'T DONE THE WORK. I'M NOT ACCUSING IN ANY WAY. IN FACT, NU SKIN INTERESTINGLY AT A CONFERENCE EARLIER THIS WEEK HAS DISTANCED THEMSELVES FROM HERBALIFE AND HAVE GIVEN SOME VERY GOOD DATA POINTS FOR WHY THEY ARE NOT A PYRAMID SCHEME. AND I THINK IT'S WORTH PEOPLE TAKING A LOOK AT IT. BUT MY POINT IS I DON'T UNDERSTAND WHY YOU WOULD BE SHORT NU SKIN AND BE BULLISH ON HERBALIFE IN LIGHT OF THE FACT THAT THEY ARE BOTH MULTI-LEVEL MARKETING COMPANIES THAT IS PAY OUT A VERY HIGH PERCENTAGE COMMISSIONS TO THEIR VERY TOP PART OF THEIR DISTRIBUTOR BASE. THEY SELL THE SAME PRODUCTS. THEY'VE BEEN IN BUSINESS—YOU KNOW, DAN SAID IT WAS PREPOSTEROUS -- WAPNER: MAYBE IT'S PERSONAL. MAYBE IT'S PERSONAL. MAYBE IT'S NOTHING MORE THAN PERSONAL. ACKMAN: THAT'S OKAY, I DON'T NEED TO BE LOVED BY EVERYONE. BUT I WOULD FIND IT SURPRISING HE WOULD TAKE HIS INVESTORS MONEY AND THEN USE THAT FOR PERSONAL GAIN. I DO THINK THERE HAS BEEN AN ATTEMPT TO "CREATE A SHORT SQUEEZE HERE". I THINK THAT SOME PEOPLE WHO SHORTED THE STOCK AFTER OUR PRESENTATION, THE SHORT INTEREST WENT UP A LOT, WERE FORCED TO COVER WHEN YOU HAD THIS BOB CHAPMAN GUY COMING OUT SAYING GREAT NEWS IS COMING TOMORROW I'VE GOT A 35% POSITION IN THE NAME. NOW MEANWHILE BOB CHAPMAN WHAT HE DOESN'T TELL YOU AND WHAT HE'S TOLD NO ONE IS WHAT HE HAS UNDER MANAGEMENT, HE'S NOT A REGISTERED ADVISER, WHICH MEANS HE'S GOT LESS THAN $100 MILLION UNDER MANAGEMENT—THERE'S NOTHING WRONG WITH THAT BUT FOR HIM TO BRAGGING ABOUT THE SIZE OF HIS POSITION WHEN IT COULD BE A FEW MILLION, WHO KNOWS. HE'S GOT THIS GREAT NEWS COMING TOMORROW, THE NEWS IS DAN LOEB FILES A 13G, WHICH IS A PASSIVE FILING, HE FILED IT WELL BEFORE HE WAS REQUIRED TO DO FROM A REGULATORY POINT OF VIEW. HE RELEASED A COPY OF HIS LETTER TO THE PRESS WITH A THESIS ABOUT WHY THIS IS A SUCH GREAT COMPANY AND THEN HE DISCLOSES THAT—YOU KNOW HE SAYS THAT HERBALIFE IS WELL KNOWN FOR HAVING A GREAT SO-CALLED BUY BACK POLICY. SO THAT ANYONE WHO WANTS TO GET OUT OF THE HERBALIFE SCHEME CAN GET OUT BY JUST RETURNING THE PRODUCT BACK TO THE COMPANY. WELL UNFORTUNATELY, DAN HASN'T DONE HIS DUE DILIGENCE BECAUSE HERBALIFE'S BUYBACK POLICY IS A FALLACY. IT DOESN'T EXIST. IT'S VERY DIFFICULT TO RETURN PRODUCT TO THE COMPANY. THAT'S WHY VERY FEW OF THE DISTRIBUTORS ARE ABLE TO RETURN PRODUCT TO THE COMPANY. I DON'T WISH DAN NEGATIVE THINGS BUT IF HE STAYS LONG HERBALIFE HE WILL LOSE HIS ENTIRE INVESTMENT. THAT'S MY PREDICTION. WAPNER: WOW. LET ME MOVE TO ANOTHER POSITION THAT IS OBVIOUSLY WELL DOCUMENTED, WELL DISCUSSED WITHIN THE MARKETS AND ON BUSINESS TELEVISION. JCPENNEY. I THOUGHT IT INTERESTING, THIS MORNING I READ A QUOTE THAT YOU SAID ABOUT PROCTER & GAMBLE AND IT READS AS FOLLOWS, "I THINK IT'S UNLIKELY THAT BOB McDONALD, THE CEO, IS THE RIGHT PERSON FOR THE COMPANY BASED ON HIS TRACK RECORD THERE." ARE YOU SURE YOU'RE NOT TALKING ABOUT RON JOHNSON? ACKMAN: YES. LOOK I THINK-- AND BY THE WAY, P&G PUT UP A VERY GOOD QUARTER. THEIR ORGANIC REVENUE GROWTH IS LOWER THAN COMPETITORS BUT THEY ARE MAKING PROGRESS. I HOPE IF BOB CAN TURN THIS INTO—TURN THIS THING AROUND, HE DESERVES ENORMOUS CREDIT AND HE'LL BE THE RIGHT GUY. AND IF HE CAN'T-- DON'T MISINTERPRET MY PREVIOUS STATEMENT, I THINK BASED ON THE LAST THREE YEARS OF P&G, REALLY CERTAINLY LOOKED LIKE THAT BOB IS NOT THE RIGHT GUY FOR THE COMPANY. BUT IF THE COMPANY CAN MAKE DRAMATIC PROGRESS AND I THINK THIS QUARTER IS AN INDICATION OF SIGNIFICANT PROGRESS, YOU KNOW, HOPE THAT BOB CAN BE SUCCESSFUL AND CAN MAKE IT. AGAIN, NOTHING AGAINST HIM. AT THE END OF THE DAY IT'S ABOUT RESULTS AND IF THREE YEARS FROM NOW RON JOHNSON IS STILL STRUGGLING TO TURN AROUND JCPENNEY, HE'S PROBABLY THE WRONG GUY. LET'S JUST STOP ON JCPENNEY FOR A MOMENT. WAPNER: OKAY. ACKMAN: WHAT RON IS DOING HERE IS SOMETHING THAT IS ALMOST NEVER BEEN DONE BEFORE, CERTAINLY IN THE CONTEXT OF A PUBLIC COMPANY. WHICH IS HE'S TAKING A GREAT OLD LINE AMERICAN ICONIC RETAILER THAT REALLY HAD DETERIORATED DRAMATICALLY OVER 30 YEARS AND MASSIVELY TRANSFORMING THE BUSINESS AND TRYING TO DO IT IN A SHORT PERIOD OF TIME. HE'S DONE INCREDIBLE THINGS. AMONG THEM HE'S COME UP WITH A VISION FOR THE FUTURE OF THE COMPANY AND THE VISION APPEARS TO BE WORKING. THE PROBLEM WITH THE VISION IS IT'S A SMALL PERCENTAGE OF THE STORE WHICH IS THE SO-CALLED SHOP STRATEGY, IT'S 10%-- 10, 11% OF THE SQUARE FOOTAGE. BUT WHAT WE HAVE SEEN TO DATE IS VERY STRONG SALES. THERE WAS THE IZOD MENTION THE OTHER DAY THAT THEIR IZOD SHOPS IN JCPENNEY ARE A HOMERUN. THE NEGATIVE IS 90% OF THE STORE, YOU KNOW VERY, VERY DIFFICULT…SALES RESULTS REPORTED SO FAR MID 20s DOWN. COMPS, THOSE ARE NUMBERS THAT NO RETAILER LIKES TO SEE. SO RON IS WORKING ON IT AND A GREAT CEO MAKES THE NECESSARY CHANGES TO TURN AROUND A BUSINESS. NOW OTHER PROGRESS THE COMPANY TOOK $900 MILLION OUT OF THE COST STRUCTURE AND I THINK THERE IS AN OPPORTUNITY FOR MORE TO BE DONE THERE. WAPNER: BUT YOU'RE NOT GOING TO WAIT THREE YEARS. YOU MENTIONED ABOUT THREE YEARS, IF HE'S NOT TURNING IT AROUND IN THREE YEARS THEN HE'S NOT THE RIGHT GUY. SURELY A GUY LIKE YOU BILL IS NOT GOING TO SIT AROUND FOR THREE YEARS AS WE KEEP TALKING ABOUT TRANSFORMATION AT THE PERIL OF SHAREHOLDERS AND FOR THAT MATTER INCLUDING YOU. YOU CONTINUE TO LOSE MONEY ON THIS INVESTMENT. ACKMAN: --ABOUT WHAT I MEAN. AGAIN, THE ANSWER HERE IS JCPENNEY'S GOING TO MAKE PROGRESS. I EXPECT IT WILL AND RON EXPECTS IT WILL AS WELL. AGAIN, NO COMPANY SURVIVES DOWN 25% COMPS OVER THREE YEARS. THAT'S NOT HAPPENING. SO RON IS GOING TO WORK TO SOLVE THE PROBLEM. I WOULD NOT PROJECT THE FUTURE BASED ON THE LAST 12 MONTHS. THAT WOULD BE THE ADVICE I WOULD GIVE. I HAVE ENORMOUS CONFIDENCE IN HIM. HE'S ONE OF THE MOST TALENTED PEOPLE I HAVE MET IN MY LIFE. HE'S BRILLIANT. HE'S BUILT A GREAT TEAM. THEY ARE WORKING INCREDIBLY HARD. YOU KNOW IT IS FUNNY PEOPLE CRITICIZED HIM FOR TAKING AWAY ALL THE SALES LAST YEAR AND GOING TO EVERYDAY LOW PRICE. AS SOME PEOPLE HAVE NOTICED THE COMPANY'S STARTED TO BRING BACK SALES, AND CLEARANCE AND THE KIND OF THINGS YOU SEE IN A TRADITIONAL RETAILER. AND HE'S GOING TO WHAT IT LOOKS LIKE FROM THE PUBLIC INFORMATION, I'M NOT GOING TO GIVE YOU THE FUTURE HERE BUT IT IS GOING TO BE A BALANCE BETWEEN EVERYDAY LOW PRICING AND SALES AND OTHER WAYS TO DRIVE TRAFFIC AND TO GIVE THE CUSTOMER VALUE WHICH IS SOMETHING THE COMPANY STANDS FOR. SO HE'S MAKING THE NECESSARY CHANGES TO STABILIZE SALES AND ULTIMATELY GROW THE SALES. AND HE'S ROLLING OUT—HE'S GOING TO BE ROLLING OUT A NEW HOME SECTION AT JCPENNEY. IT'S GOING TO BE IN 500, 600 STORES BY MAY. I HAVE SEEN THE PROTOTYPE AND SHAREHOLDERS WILL GET TO SEE THE PROTOTYPE AT THE VALLEY VIEW MALL THE TOP FLOOR OF THE THREE STORY JCPENNEY THERE IS UNBELIEVABLE. IT IS THE BEST HOME SECTION OF ANY STORE IN THE COUNTRY. IF YOU THINK ABOUT THE TURNAROUND AT MACY'S, IT WAS LED BY HOME. PEOPLE WILL LOVE SHOPPING-- 17 DIFFERENT SHOPS. COMPLETELY CONTAINED ENVIRONMENT. HOME WAS THE WEAKEST PART OF JCPENNY LAST YEAR, DOWN BIG NUMBERS. IT WILL BE THE BEST PART OF JCPENNY VERSUS LAST YEAR. WAPNER: HEY BILL, AS IT HAPPENS IN LIVE TELEVISION AND HOW THESE THINGS CAN UNFOLD CARL ICAHN RELEASED A STATEMENT RESPONDING TO THE ACCUSATIONS THAT YOU HAVE MADE TOWARDS HIM. HE'S ALSO WANTING TO CALL IN AND RESPOND TO YOU DIRECTLY. I WILL GIVE YOU TWO CHOICES. YOU CAN HANG ON THE PHONE AND WE CAN BRING MR. ICAHN IN AND YOU GUYS CAN HAVE THE DISCUSSION WITH ME ON LIVE TELEVISION, IF YOU'RE UP FOR THAT. ACKMAN: THE ANSWER IS, AGAIN, I THINK THE FOCUS HERE FUNDAMENTALLY I HAVE NOTHING PERSONAL AGAINST CARL ICAHN. WHAT UNFORTUNATELY HAPPENED IS -- YOU KNOW, IF CARL WANTS TO COME ON, LET'S MAKE IT FUN TV. LET'S PUT IT TO BED AND MOVE ON. IF YOU PROMISE ME WE CAN MOVE FROM HERE AND FOCUS ON WHETHER HERBALIFE IS A PYRAMID SCHEME OR NOT FOR THE FUTURE OF CNBC TELEVISION I'M HAPPY TO TALK TO CARL ON TV. WAPNER: WHY DON'T YOU DO ME A FAVOR THEN IF YOU WOULD, HOLD ON. WE'LL TAKE A QUICK BREAK, BRING IN CARL AND HAVE THE CONVERSATION RIGHT HERE LIVE ON CNBC. WE'RE BACK IN TWO MINUTES. AGAIN, CARL ICAHN CALLING IN TO ADDRESS BILL ACKMAN DIRECTLY WHEN WE COME BACK. WAPNER: WELCOME BACK TO THE HALFTIME REPORT LIVE TODAY FROM THE NYSE WE'VE BEEN SPEAKING WITH HEDGE FUND INVESTOR BILL ACKMAN NOW IT'S TIME TO HEAR WHAT CARL ICAHN HAS TO THINKS OF OUR CONVERSATION. HE JOINS US LIVE ON THE PHONE. GENTLEMEN LET ME MAKE SURE I HAVE BOTH OF YOU THERE FOR TECHNICAL PURPOSES. CARL ARE YOU THERE? BILL ARE YOU THERE? ICAHN: I AM HERE. ACKMAN: I AM HERE AS WELL. WAPNER: CARL WE HAVE BEEN SPEAKING WITH BILL FOR THE LAST SEVERAL MINUTES FOLLOWING THE ACCUSATIONS YOU MADE YESTERDAY AND HE'S ESSENTIALLY SAYING THAT YOU'RE A HYPOCRITE CARL IN YOUR ARGUMENT. THAT YOU'VE LAID OUT SHORT POSITIONS YOURSELF PUBLICLY HOW DO YOU RESPOND? ICAHN: WELL YOU KNOW LISTEN I REALLY SORT OF HAD IT WITH THIS GUY ACKMAN. YOU KNOW WHY DON'T WE GO BACK OVER A LITTLE HISTORY WITH HIM. I'M NOT GOING TO GET INTO TALKING ABOUT SHORT POSITIONS AS MUCH AS MAYBE YOU WOULD LIKE ME TO BUT HEY LET'S START OUT WITH MY HISTORY WITH THIS GUY. MINDING MY OWN BUSINESS AND IN 2003 I GET A CALL FROM THIS ACKMAN GUY AND I'M TELLING YOU HE IS LIKE THE CRY BABY IN THE SCHOOL YARD. I WENT TO A TOUGH SCHOOL IN QUEENS 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 AND HE'S IN MY OFFICE TALKING ABOUT HOW I COULD HELP HIM AND IT WAS LIKE IN THE OLD SONG, YOU WILL RUE THE DAY I EVER MET THE GUY. HE'S THERE TALKING ABOUT THE COMPANY. I ACTUALLY CALLED A FRIEND WHO KNEW HIM WHO SAID, DON'T DEAL WITH THE GUY. HE'S IN MAJOR MAJOR TROUBLE. YOU KNOW, I WILL JUST READ TO YOU SOME OF THE STUFF THEY WERE SAYING ABOUT HIM THEN. YOU KNOW, THIS WAS AN ARTICLE IN THE NEW YORK TIMES. THESE GUYS RECEIVED REQUEST FOR INVESTMENTS, ASKING FOR THEIR MONEY BACK. THEY HAD SUFFERED A DEVASTATING SETBACK. THEN, YOU KNOW, DOES THIS REMIND YOU OF ANYTHING? THIS ARTICLE SAYS GOTHAMS PUBLICATIONS OF UPBEAT RESEARCH ABOUT ONE COMPANY EVEN AS THE FUND WAS QUIETLY SELLING ITS SHARES, LOOKED VERY MUCH LIKE A CLASSIC PUMP AND DUMP SCHEME. THEN IT GOES ON TO SAY ELIOT SPITZER NY STATE ATTORNEY GENERAL HAD BEEN INVESTIGATING GOTHAM ITS PRINCIPLES AND ACTIVITIES. IT GOES ON TO SAY THIS S.E.C. IS LOOKING INTO THEM. YOU KNOW, I REALLY HAVE TO ADMIT I DIDN'T READ THIS AND I GOT INVOLVED WITH THIS ACKMAN GUY AND IT COST ME MONEY. WAPNER: WELL, BECAUSE IT COST YOU MONEY CARL BECAUSE A COURT SAID YOU RENEGED ON THE AGREEMENT YOU GUYS HAD AND A COURT REPEATEDLY SAID THAT. ICAHN: LET ME SAY ONE THING. I WILL TELL YOU I HAVE DONE STUFF THROUGH THE '70s AND '80s ON A HANDSHAKE. I WILL TELL YOU CATEGORICALLY ACKMAN KNEW HE WASN'T GOING TO GET HALF THE PROFITS. THIS GUY WAS IN SUCH TROUBLE HE WAS IN NO POSITION TO ASK FOR ANYTHING. AT THE VERY END OF THE DEAL BEFORE WE SIGNED HE SAID, YOU HAVE TO DO ME A FAVOR AND SIGN SCHMUCK INSURANCE SO IF YOU FLIP THE STOCK THEN I GET HALF THE PROFITS. I SAID, HEY, BILL, I'M NOT GOING TO FLIP THE STOCK. I'M GOING TO MAKE A TENDER OFFER FOR IT. AND I DID. AND I SAID, AND THE COMPANY WILL FIND ANOTHER BUYER OR I WILL BUY IT SO YOU WON'T GET PROFITS. HE SAID, I REALIZE THAT. I JUST HAVE TO SHOW MY INVESTORS -- AND HE HAD ONLY ONE OR TWO LEFT MAYBE BY THAT TIME. GOD KNOWS WHAT HE HAD LEFT. HE SAID I HAVE TO SHOW MY INVESTORS I'M MAKING MONEY. ALL THAT CRAP. AND AT THE END WE WROTE IT AND MY LAWYER IS A GREAT LAWYER HE'S WITH ME 20 YEARS. HE'S STILL WITH ME. WE WROTE IT AND WE STILL THINK WHAT WE SAID IS RIGHT. BUT ACKMAN GOT A NEW YORK COURT TO AGREE THE FACT THAT THEY TOOK IT AWAY FROM US, WE NEVER SOLD IT. THEY TOOK THE STOCK AWAY. WE VOTED AGAINST THE DEAL AND THEY TOOK IT AWAY -- I WAS AMAZED WHAT ACKMAN CALLED ME I REALLY WAS EVEN THOUGH BY THAT TIME I REALIZED HE'S THE QUINTESSENTIAL EXAMPLE ON WALL STREET IF YOU WANT A FRIEND GET A DOG BECAUSE THAT'S WHAT THIS IS ALL ABOUT. WAPNER: BUT CARL I UNDERSTAND. I MEAN REHASHING THE LAST YOU KNOW, DECADE, IN WHICH A COURT REPEATEDLY SIDED WITH BILL ACKMAN. I MEAN LET'S GET BACK TO THE SUBSTANCE OF THE CONVERSATION. YOU HAVE AN ISSUE WITH THE WAY THAT BILL WENT ABOUT THE HERBALIFE SHORT AS AGGRESSIVELY AND AS PUBLICLY AS HE DID. AND I'D LIKE TO GIVE BILL A CHANCE TO RESPOND TO YOU AS WELL. ACKMAN: I WOULD LOVE THAT. WAPNER: BILL, PLEASE. ACKMAN: SHOULD I GO AHEAD? WAPNER: YEAH. ACKMAN: OK LOOK, I WOULD ENCOURAGE YOU TO INVITE ELIOT SPITZER ON THE SHOW AND ELIOT SPITZER WAS OUR ATTORNEY GENERAL BACK THEN AND HE INVESTIGATED SOME ACCUSATIONS AND UNFORTUNATELY, THE PRESS CAN WRITE ARTICLES THAT SAY WHATEVER THE PRESS WANTS TO SAY. BUT ULTIMATELY, WHAT'S INTERESTING IS TEN YEARS AGO I WAS SHORT A COMPANY CALLED MBIA AND I WENT OUT VERY PUBLICLY CRITICIZING MBIA'S TRIPLE A RATING. I WROTE A 66-PAGE WHITE PAPER IT'S CALLED "IS MBIA TRIPLE A?". I ENCOURAGE YOU TO READ IT, YOU CAN FIND IT ON THE INTERNET. AND I SAID THAT THIS COMPANY THAT HAD A TRIPLE A RATING FROM THE RATINGS AGENCIES WAS BASICALLY DIDN'T DESERVE THE RATING AND THAT IT HAD TAKEN AN ORDINATE RISK WITH SUBPRIME CDOs AND A BUNCH OF OTHER EXPOSURES AND COULD CATALYZE A CREDIT CRISIS. MBIA CAME AFTER ME VERY AGGRESSIVELY AS HERBALIFE HAS COME AFTER US VERY AGGRESSIVELY – ACCUSED ME OF MARKET MANIPULATION. THEY CONTACTED THE TREASURER OF THE STATE OF NEW YORK, THE TREASURER OF THE STATE OF NEW YORK CALLED ELIOT SPITZER'S OFFICE AND SAID HEY, THERE IS AN EVIL HEDGE FUND GUY ATTACKING OUR COMPANY, HE IS SAYING WE DON'T DESERVE OUR TRIPLE A RATING, BY THE WAY WE ARE THE BIGGEST GUARANTOR OF NEW YORK STATE AND CITY BONDS – YOU MIGHT WANT TO GO AND TAKE A LOOK AT THIS GUY. AND ELIOT, YOU KNOW, FOLLOWED THAT LEAD, IT IS A PERFECTLY LEGITIMATE LEAD. AND HE LOOKED INTO IT AND HE INVESTIGATED WHETHER WE WERE CORRECT. I TESTIFIED FIVE OR SIX DAYS ON THE RECORD EXPLAINING BOND INSURANCE AND ACCOUNTING AND RESERVING AND WHY A 150 TO 1 LEVERED COMPANY DIDN'T DESERVE A TRIPLE A RATING AND ULTIMATELY THEY HAD CONCLUDED WE HAD DONE NOTHING WRONG AND IF YOU CAN CALL ELIOT UP HIMSELF AND HE WILL TELL YOU THE FACTS AND I ACTUALLY GOT TO KNOW HIM AFTER THAT AND HAVE A NICE RELATIONSHIP WITH HIM – NOT A CLOSE ONE, BUT A NICE RELATIONSHIP. ANYWAY, SO DURING THIS PERIOD AS A RESULT OF MY DECISION TO WIND DOWN THE FUND, WE HAD A COURT CASE GO AGAINST US IN A MERGER THAT WAS ULTIMATELY REVERSED ON APPEAL. THERE IS A BOOK ABOUT THIS WHOLE STORY CALLED "CONFIDENCE GAME" WHICH IS WORTH A READ. WAPNER: AND IF WE HAD THREE HOURS, WE COULD GO THROUGH THAT. ACKMAN: BUT IN THAT CONTEXT, WE WERE WINDING DOWN THE FUND. WE WERE UNDER NO PRESSURE TO WIND DOWN THE FUND. IN FACT, THE LAST TINY LITTLE ASSET WE STILL HAVE, OUR GOAL WAS TO MAXIMIZE THE OUTCOME FOR OUR INVESTORS – I NEVER WENT TO CARL'S OFFICE TO PITCH HIM ON HALLWOOD REALTY. WE DID THE TRANSACTION OVER THE PHONE AND I'LL GET INTO THAT IN A SECOND. WE HAD TWO BIDS FOR OUR DEAL WITH CARL ICAHN. ONE WAS AT A HIGHER PRICE, IT WAS ALL CASH. I TOLD CARL THAT I WOULD DO A DEAL WITH HIM, I HAD CONFIDENCE HE COULD EXTRACT THE VALUE IN A COMPANY. IT WAS WORTH MORE THAN TWICE THE PRICE IT WAS TRADING FOR AND THAT'S WHY CARL AGREED TO PAY ME 80 DOLLARS A SHARE IN CASH, WHICH WAS LESS THAN WHAT WE COULD HAVE GOTTEN. YOU COULD HAVE SOLD THE POSITION FOR 90 BUCKS TO SOMEONE ELSE, OR 85 – I DON'T REMEMBER THE EXACT NUMBER, BUT WITH CARL I GOT 80 DOLLARS PLUS WHAT HE CALLED SCHMUCK INSURANCE. AGAIN, WHO FIGURED OUT THE SCHMUCK INSURANCE TERMINOLOGY? WAS CARL ICAHN. IT WAS 50 PERCENT OF HIS PROFIT IF HE SOLD IN THREE YEARS AND THE RISK TO US WAS THAT CARL GOT THE COMPANY. IF CARL BID FOR THE COMPANY AND GOT IT, WE'D GET NOTHING. BUT IF SOMEONE ELSE WHO HAD A LOWER COST OF CAPITAL THAN CARL ENDED UP WITH THE COMPANY, THEN CARL WOULD HAVE TO PAY US AS LONG AS THE DEAL HAPPENED IN THREE YEARS. AND I THOUGHT HE MIGHT JUST WAIT THREE YEARS BEFORE MAKING A BID OR JUST HOLD THE THING UP SO WE DIDN'T GET PAID. THAT WAS THE RISK TO US. NOW, I WAS CONCERNED ABOUT DEALING WITH CARL ICAHN BECAUSE CARL ICAHN UNFORTUNATELY, DOES NOT HAVE A GOOD REPUTATION FOR BEING A HANDSHAKE GUY. AND IF YOU NOTICE THE AGREEMENT THAT WRITTEN, I INSISTED WE KEEP IT UNDER TEN PAGES. THERE IS A SIMPLE EXAMPLE IN THE AGREEMENT. YOU NEVER SEE A LAWYER. I TOLD THE LAWYERS I WANTED TO PUT AN EXAMPLE IN THIS AND THEY SAID NO, DON'T PUT AN EXAMPLE IN, YOU KNOW WE WILL JUST USE WORDS. I SAID WE CAN USE WORDS, BUT I WANT TO HAVE AN EXAMPLE. I WANT TO MAKE SURE THERE IS NO CONFUSION HERE. WHEN CARL SAYS THIS TRANSACTION WAS A MERGER. OK, WHAT HAPPENED IN THIS TRANSACTION IS THE COMPANY – CARL BID 100 A SHARE FOR THE COMPANY. THE COMPANY HIRED MORGAN STANLEY TO SELL THE COMPANY. CARL RAISED HIS BID TO 120 A SHARE AND THE COMPANY MADE A DEAL TO SEE IT TO A REIT WHOSE COST OF CAPITAL IS LOWER THAN CARL'S. THEY GOT 136 DOLLARS A SHARE FOR THE COMPANY. AND THE TRANSACTION WAS STRUCTURED AS A CASH-OUT MERGER. STICK WITH ME. BECAUSE THIS IS IMPORTANT AND CARL HAS BEEN MALIGNING MY REPUTATION, SO IT'S VERY IMPORTANT THAT WE GET TO THE FACTS. ALL OF THIS IS PROVABLE IN COURTS. OK, SO LET ME JUST FINISH. AND THE TRANSACTIONS WERE CASHED OUT IN A CASH-OUT MERGER, OK? CARL GOT CASH FOR HIS SHARES, HE NO LONGER HAS THE SHARES. AND VERY CLEAR, OK? CARL MADE ALL KINDS OF ARGUMENTS SAYING HE DIDN'T DO IT VOLUNTARILY. THAT'S TRUE. BUT OUR AGREEMENT NEVER SAID VOLUNTARILY. IT SAID IF HE SOLD OR OTHERWISE TRANSFERRED. WHY DO WE SAY SELL OR OTHERWISE TRANSFERREDT? BECAUSE WE WANTED THIS TO BE THE BROADEST POSSIBLE READING THAT CARL COULDN'T WORK HIS WAY AROUND THE AGREEMENT. I'VE GOT A FEW MORE POINTS TO MAKE. STICK WITH ME FOR ONE MORE SECOND. WAPNER: YEAH, ONE MORE SECOND. BECAUSE I MEAN LOOK, WE CAN GO BACK THROUGH THE WHOLE MERITS OF THE CASE. ACKMAN: I THINK THIS STUFF IS IMPORTANT, OK? BECAUSE AGAIN, IF SOMEONE GOES ON TV AND TRIES TO SLANDER YOUR REPUTATION, I THINK YOU HAVE AN – BE GIVEN PROPER OPPORTUNITY TO RESPOND. WAPNER: FAIR ENOUGH. ACKMAN: CARL BY THE WAY MADE A LOT OF MONEY WITH US. HE BOUGHT THE STOCK FROM US AT 80 AND HE SOLD IT FOR 136 DOLLARS A SHARE, OK? WHEN I DIDN'T GET PAID WITHIN THE TWO BUSINESS DAYS I WAS SUPPOSED TO GET PAID AFTER THE DEAL CLOSED, I CALLED CARL UP, I CONGRATULATED HIM ON THE DEAL. AND HE SAID, WHAT DEAL? AND I EXPLAINED IT TO HIM. HE SAID, NO, I DIDN'T AGREE TO THAT. I SAID CARL, WE HAVE A TEN-PAGE AGREEMENT, IT'S A REALLY SIMPLE AGREEMENT, I DON'T – YOU KNOW. HE SAID, I'M NOT GOING TO PAY YOU. I SAID, WHEN YOU KNOW THEN, I'M GOING TO HAVE TO SUE YOU. AND HE'S SAYS GO AHEAD, SUE ME. IT WON'T SURVIVE SUMMARY JUDGMENT. I SAID CARL, WE ARE GOING TO GET SUMMARY JUDGMENT. WE DID GET SUMMARY JUDGMENT. YOU KNOW WHAT HE SAID TO ME? HE SAYS BILL YOU KNOW WHAT WE'RE GOING TO DO? I'M GOING TO SUE YOU. AND HE THREATENED TO SUE ME. WHY DID HE THREATEN TO SUE ME? WHY WAS HE DOING? HE WAS A BULLY. I WAS NOT IN A VERY GOOD PLACE IN MY BUSINESS CAREER. I WAS UNDER INVESTIGATION BY ELIOT SPITZER, I WAS WINDING DOWN MY FUND. THERE WAS NEGATIVE PRESS ABOUT GOTHAM PARTNERS AT THE TIME. I WAS SHORT MBIA. THEY WERE AGGRESSIVELY ATTACKING ME IN THE PRESS. AND CARL ICAHN THOUGHT YOU KNOW WHAT? THIS GUY IS ROAD KILL ON THE HEDGE FUND HIGHWAY. I'M NEVER GOING TO HAVE TO WORRY ABOUT THIS KID AGAIN. HE'S NOT EVEN GOING TO HAVE THE RESOURCES TO SUE ME SO I'M JUST NOT GOING TO PAY HIM. AND BY THE WAY, THE NUMBER OF STORIES I HAVE HEARD FROM BANKERS, FROM LAWYERS, FROM PEOPLE HE'S TRANSACTED WITH WHERE HE'S DONE SIMILAR KINDS OF THINGS TO TAKE ADVANTAGE OF SOMEONE. WELL THE FORTUNATE THING IN LIFE IS I TOLD CARL I WOULD GO TO THE END OF THE EARTH TO MAKE SURE HE PAID MY INVESTORS. THIS WAS NOT MY MONEY. THIS WAS MY INVESTORS MONEY. EVERY PENNY THAT HE OWED ME WITH INTEREST. I WENT TO THE END OF THE DAY. HE TRIED TO SETTLE WITH ME. HE OFFERED 10 MILLION DOLLARS TO MY FAVORITE CHARITY OVER A DINNER THAT WE HAD AT HIS FAVORITE ITALIAN RESTAURANT. AGAIN, I THINK THIS IS NOT A GREAT USE OF CNBC AIR TIME. BUT WHAT I CAN TELL YOU IS THIS IS NOT AN HONEST GUY AND THIS IS NOT A GUY WHO KEEPS HIS WORD. THIS IS A GUY WHO TAKES ADVANTAGE OF LITTLE PEOPLE. WAPNER: LET'S MAKE GOOD USE OF IT OR BETTER USE OF IT THEN. CARL, WHY DON'T YOU JUST COME CLEAN ON THE HERBALIFE THING? ARE YOU LONG OR NOT? THE WHOLE MARKET KNOWS OR SUSPECTS YOU ARE. ICAHN: HEY LISTEN, I DIDN'T GET ON TO BE BULLIED BY YOU. IF I CAN TALK, LET ME TALK. BUT I DON'T NEED YOU TO -- HELLO? WAPNER: YEAH, I'M HERE. NO ONE'S BULLYING YOU, CARL. I MEAN, YOU'RE THE ONE WHO CALLED IN TO OUR SHOW TO TALK TO BILL ACKMAN. AND THE PRINCIPLE ISSUE IS THE HERBALIFE THING. ICAHN: NO, NO. LISTEN TO ME. I WAS CALLED IN BY MAX MEYERS TO HAVE A CONVERSATION, NOT TO ARGUE WITH YOU. IF YOU WANT TO TAKE -- HELLO? WAPNER: YEAH, WE'RE LISTENING. ICAHN: IF YOU'RE LISTENING, LET ME TALK. YOU KNOW, I WANT TO SAY WHAT I WANT TO SAY. AND I'M NOT GOING TO TALK ABOUT MY HERBALIFE POSITION BECAUSE YOU WANT TO BULLY ME. WAPNER: I'M NOT BULLYING YOU. I'M ASKING THE QUESTION EVERYBODY WANTS TO KNOW, CARL THAT'S ALL. BUT YOU CAN MAKE YOUR STATEMENT. ICAHN: I'M GOING TO TALK ABOUT WHAT I WANT TO TALK ABOUT. WAPNER: OKAY. ICAHN: IF YOU WANT TO TAKE THAT POSITION I WILL NEVER GO ON CNBC, YOU KNOW. YOU CAN SAY WHAT THE HELL YOU WANT. WAPNER: OKAY. ICAHN: BUT I'M GOING TO TELL YOU, I'M GOING TO TALK ABOUT WHAT ACKMAN JUST SAID ABOUT ME, NOT ABOUT HERBALIFE. AND I'LL TALK ABOUT HERBALIFE WHEN I GOD DAMN WANT TO, NOT WHEN YOU ASK ME. WAPNER: OKAY. ICAHN: I'M NEVER GOING ON A SHOW WITH YOU AGAIN, THAT'S FOR DAMN SURE. SO LET'S START WITH WHAT I WANT TO SAY. ACKMAN IS A LIAR. OKAY? TO BEGIN WITH, I HAVE LIVED MY LIFE FROM 1960s AND '70s BY HANDSHAKES. I ALMOST LOST MY FIRM A FEW TIMES BY HANDSHAKES. ACKMAN HAS JUMPED THE GUN. HE'S GOT ONE OF THE WORST REPUTATIONS ON WALL STREET. AND I'M GOING TO TELL YOU THIS HERBALIFE IS A CLASSIC EXAMPLE OF WHAT HE DOES. LET'S LOOK AT HERBALIFE. ACKMAN WAS DOING BADLY IN 2012. HE WAS DOWN 2%, 3%. HE PROBABLY WOKE UP IN THE MORNING AND SAID LET'S SEE WHAT COMPANY WE CAN DESTROY AND PUT OUT A BEAR RATE ON IT. IT HAS HAPPENED FROM THE LATE 80s TIL NOW AND GO DO A BEAR RATE, KILL THE STOCK. AND NOW WE CAN SHOW OUR INVESTORS WE MADE MORE MONEY. AND BY THE WAY, IF WE CAN MARK THESE THINGS AND MAKE MORE MONEY HE SAYS THAT HE'S NOT TAKING THE PROFIT. BUT THAT GIVES HIM A BETTER RATE OF RETURN FOR HIMSELF. ACKMAN HAS DONE THAT, IF YOU READ THE ARTICLES ABOUT HIM, HE'S DONE IT ALL HIS LIFE. AND I WILL SWEAR TO YOU AND I DON'T NEED – WE DIDN'T MAKE A LOT OF MONEY ON THIS GOD DAMN CRAZY THING I DID WITH HIM. WE MADE 4 MILLION. BUT I WAS INCENSED BECAUSE I WILL TELL YOU THAT WITHOUT QUESTION I WILL SWEAR TO IT ON ANY BIBLE YOU WANT THAT I HAD A VERBAL AGREEMENT WITH HIM THAT HE WAS NOT GOING TO GET ANY PIECE OF THE MONEY AND AS HE SAID, HE WAS IN MAJOR, MAJOR TROUBLE. AND HE'S BASICALLY LYING. HE WAS IN MAJOR TROUBLE AND HE SAID, LOOK, I'M NOT GOING TO TAKING ANY OF THE PROFITS. BUT THERE IS ONE THING I WILL DO. I DON'T WANT YOU JUST FLIPPING THE STOCK IN A COUPLE OF WEEKS OR COUPLE OF MONTHS OR WHATEVER IT WAS. AND THEREFORE, PUT THAT IN. WE DIDN'T FLIP THE STOCK. THE AGREEMENT, WE THOUGHT UNFORTUNATELY SAID THAT IT ONLY APPLIES TO FLIPPING THE STOCK. AND UNFORTUNATELY THE AGREEMENT WASN'T WELL WRITTEN. MY LAWYER IS GREAT LAYWER, BUT THIS ONE WAS MISSED. SO WE GO INTO THAT. AND I WILL TELL YOU SOMETHING. AS FAR AS I'M CONCERNED, HE WANTED TO HAVE DINNER ONCE WITH ME. I HAD DINNER WITH HIM AND I GOT TO TELL YOU I LAUGHED. I COULDN'T FIGURE OUT IF HE WAS THE MOST SANCTIMONIOUS GUY I EVER MET IN MY LIFE OR THE MOST ARROGANT. AND THAT'S ACKMAN AND THAT'S THE LAST TIME I MET WITH THE GUY. I DON'T WANT TO MEET HIM – OH, YEAH. AND WHEN IT COMES TO FRIENDS HE CALLED ME AND SAID, HEY, WE WERE FRIENDS, WE COULD MAKE A LOT OF MONEY INVESTING TOGETHER. AND I KNEW THAT EVEN IF I WAS A FRIEND I WOULD NEVER INVEST WITH THIS GUY. BECAUSE I TELL YOU, THE GUY TAKES INORDINATE RISKS. WAPNER: CARL LET ME, IF I MAY. ICAHN: LET ME FINISH AND SAY WHAT THE HELL I WANT TO SAY. YOU LET ACKMAN TALK. SO LET ME TALK. WAPNER: YOU HAVE BEEN TALKING. OKAY. YOU CAN CONTINUE. ICAHN: OKAY. THANK YOU. AND I WILL TELL YOU THAT ACKMAN TAKES INORDINATE RISK. HE GOES SHORT 20% OF A COMPANY. GOES OUT THERE AND I WILL TELL YOU THIS COULD BE THE MOTHER OF ALL SHORT SQUEEZES. I'M GOING TO TELL YOU THIS. THAT ONE DAY IF SOMEBODY TENDERS FOR THIS COMPANY AND WANTS ALL THEIR STOCK BACK, WHAT'S ACKMAN GOING TO DO? HISTORY REPEATS ITSELF. HE'LL BE BACK WHERE HE WAS IN 2003 WITH ALL THE GUYS REDEEMING AND WHERE IS HE GOING TO GET THE MONEY IN THE STOCK FOR THAT? BUT THAT'S NOT EVEN MY ISSUE. I DON'T HAVE AN INVESTMENT WITH ACKMAN. I WOULDN'T HAVE AN INVESTMENT WITH ACKMAN IF YOU PAID ME TO DO IT, IF ACKMAN PAID ME TO DO IT. AND YOU KNOW, ACKMAN'S REPUTATION IS SECOND TO NONE. AS FAR AS I WAS CONCERNED I MADE A HUGE MISTAKE GETTING INVOLVED WITH HIM. AND WHAT IS HE EVEN WORTH? AFTER HE WON HE PLANTED SOME ARTICLE IN THE NEW YORK TIMES POUNDING HIS CHEST TELLING THE WORLD HOW GREAT HE WAS. YOU KNOW, AS FAR AS I'M CONCERNED THE GUY IS A MAJOR LOSER. YOU KNOW, DISRAELI ONCE SAID ABOUT SOMEBODY THAT SPOKE AT THE PARLIAMENT, A YOUNG GUY WHO SPOKE AT THE PARLIAMENT, YOUNG MAN, I WOULD BE HAPPY IF I COULD BE AS SURE OF ONE THING IN MY LIFE AS YOU ARE SURE OF EVERYTHING. IF YOU EVER LISTEN TO ACKMAN, HE'LL TELL YOU WHAT TO DO, HOW TO DO IT, WHERE TO GO. I WAS DIZZY AFTER HAVING DINNER WITH HIM. HERE'S WHERE YOU SHOULD GIVE YOUR MONEY, WHAT YOU SHOULD DO. WAPNER: CARL? ICAHN: OK, LISTEN. IT'S STUPID TO KEEP GOING OVER IT. BUT, I WILL TELL YOU ONE DAY THAT I THINK HALF COULD BE THE MOTHER OF ALL SHORT SQUEEZES. THAT'S NOT ME SAYING IT. BUT ACKMAN DID IT -- LOOK AT THE TIMING. ACKMAN DID IT WITH A WEEK TO GO OR A MONTH TO GO BEFORE HE HAD TO SHOW IN HIS RESULTS. HIS RESULTS WERE BAD FOR 2012. AND THIS GOT HIS RESULTS UP DOUBLE SO HE COULD GET FEES FOR HIMSELF. AND THEN HE TALKS ABOUT CHARITY. THAT'S COMPLETE BULLS--T. HE'S NOT GIVING IT TO CHARITY. HIS LIMITED PARTNERS AREN'T GOING TO GIVE IT TO CHARITY ASSUMING THEY DON'T NEED CHARITY THEMSELVES. WAPNER: CARL -- ICAHN: NOW THAT'S ALL I'LL SAY ABOUT ACKMAN. WAPNER: LET ME REMIND YOU THAT WE ARE ON LIVE TELEVISION. SO THAT WAS AN INTERESTING CHOICE OF WORDS. BUT, LET ME DO THIS. THE GUYS ON THE TRADING FLOOR DOWN HERE AT THE NEW YORK STOCK EXCHANGE CLEARLY APPRECIATE IT AS WELL. ACKMAN: SORRY I NEED TO HAVE AN OPPORTUNITY JUST TO ADDRESS A FEW SPECIFIC THINGS. CAN I SAY A COUPLE OF THINGS AND THEN WE WILL MOVE ON? WAPNER: YEAH. ACKMAN: OK, THE LAST THING, JUST TO CLEAR THE RECORD. OK SO PERSHING SQUARE WAS NOT HAVING A BAD YEAR IN 2012 AND HERBALIFE DID NOT DOUBLE OUR RETURNS. OK SO THAT IS JUST FALSE. ICAHN: WHAT? I CAN'T HEAR WHAT YOU SAID, BILL. I'M SORRY I CAN'T HEAR YOU. ACKMAN: CARL, YOU AND I CAN TALK OFF LINE. WE ARE WASTING THE WORLD'S TIME ON THIS THING. SO, I THINK THAT CARL EITHER HAS A VERY, VERY BAD MEMORY OR HE HAS TROUBLE WITH THE TRUTH. WE HAVE A VERY -- BECAUSE WE DIDN'T MAKE A VERBAL AGREEMENT ON HALLWOOD, WE MADE A WRITTEN ONE. HE'S GOT VERY GOOD LAWYERS AS HE SAYS -- JUST READ THE AGREEMENT. THE AGREEMENT WE PUT ON THE WEB. IT'S A TEN-PAGE AGREEMENT. CARL CAN SAY WHAT HE WANTS TODAY ABOUT WHAT HE THOUGH HE SAID BACK THEN. BUT THIS WAS MUCH MORE IMPORTANT TO ME THAN IT WAS TO CARL. OBVIOUSLY WE READ THE AGREEMENT. CARL IS A BIG BOY. HE SIGNED THE AGREEMENT AND THEN WE HAD SEVERAL COURTS CONCLUDE THAT WE WERE RIGHT AND HE HELD US UP AS LONG AS HE COULD. THE BIG ISSUE ABOUT CARL ICAHN IS HE IS NOT USED TO SOMEONE STANDING UP TO HIM. AND PARTICULARLY A LITTLE GUY LIKE ME IN 2003, WAS IN A DIFFICULT SPOT AND BY THE WAY, WE DID NOTHING WRONG. BUT WE CRITICIZED A BIG PUBLIC COMPANY AND THEY HAD MORE RESOURCES THAN WE DID. THEY MADE OUR LIFE VERY MISERABLE. WE WERE INVESTIGATED. BUT THE BENEFIT OF THE INVESTIGATION IS WE WERE EXONERATED. AND ULTIMATELY, WE GOT OUR DUE ON MBIA. THE WORLD REALIZE WE WERE RIGHT. THE STOCK WENT FROM THE 70s TO SINGLE DOLLARS PER SHARE. THE TDS WENT TO A COUPLE THOUSAND BASIS POINTS. AND WE MADE A LOT OF MONEY FOR OUR INVESTORS. AND I GAVE $150 MILLION, WHICH WAS MY SHARE OF THE PROFITS FROM THE MBIA INVESTMENT TO THE PERSHING SQUARE FOUNDATION AND WE HAVE GIVEN AWAY MORE THAN THAT. I'M GOING TO DO THE SAME THING ALL OVER AGAIN WITH HERBALIFE. HERBALIFE IS GOING TO TRY TO ATTACK MY INTEGRITY. CARL CAN TRY TO ORCESTRATE A SHORT SQUEEZE. HE CAN DO WHATEVER HE WANTS. HE CAN TRY TO SCARE MY INVESTORS FROM INVESTING WITH ME, WHICH IT SOUNDS LIKE HE IS ATTEMPTING TO DO ON THIS CALL. WE TAKE PRUDENT RISKS AT PERSHING SQUARE. WE ARE AN UNLEVERED FUND AND WE ARE VERY THOUGHTFUL IN THE WAY THAT WE DO OUR BUSINESS. I'M GOING TO END MY – YOU KNOW, I TOLD CARL AFTER THE WHOLE THING, HE CALLED ME UP AND LITERALLY SAID, BILL, WE CAN BE FRIENDS NOW. I WISH I HAD A RECORDING OF THE CONVERSATION. I SIMPLY SAID TO HIM, LOOK, CARL, YOU ARE NO FRIEND OF MINE. AND THAT WAS IT. EVERY TIME HE GOES TO TV, I WILL DEFEND MYSELF. ICAHN: THAT'S NONSENSE. I NEVER SAID THAT I WANT TO BE FRIENDS WITH YOU, BILL. I WOULDN'T BE FRIENDS WITH YOU -- ACKMAN: OKAY, OKAY, OKAY CARL. ICAHN: YOU SAID TO ME, YOU'D LIKE TO BE FRIENDS SO THAT WE COULD INVEST TOGETHER. ACKMAN: OK CARL. I HAVE NO INTEREST. YOU THINK I WANT TO INVEST WITH YOU? OK, LET'S MOVE ON. ICAHN: I WOULDN'T DO BUSINESS WITH YOU IF YOU WERE THE LAST MAN ON EARTH. ACKMAN: LET'S MOVE ON. WAPNER: CARL, LET ME JUST ASK YOU, THE CRUX OF THE ARGUMENT, DOESN'T REALLY GO BACK, OR DOESN'T SO MUCH FOCUS ON TEN YEARS AGO OR MAYBE IT DOES. IT FOCUSES ON THE MOST RECENT HISTORY THAT IS BILL ACKMAN'S SHORT PLAY ON HERBALIFE. YOU CRITICIZED HIM QUITE HEAVILY FOR THE WAY HE WENT PUBLIC WITH THE SHORT. WOULD YOU BE WILLING TO ADMIT THAT IN THE PAST, LOOK, YOU'VE GOT SHARP ELBOWS AS WELL. YOU'VE GOT WEIGHT TO THROW AROUND TOO. THAT, THAT THE WAY OF THE SHORT WORLD, ISN'T IT, CARL? ICAHN" LISTEN, IF I'M GOING TO ADMIT IT, THAT I OWN STOCK, I'M NOT GOING TO ADMIT IT WITH A GUY LIKE YOU ON TV. I DON'T THINK YOU HAVE BEEN HANDLING THIS FAIRLY. I THINK YOU ARE TRYING TO ATTACK ME AND BULLY ME INTO ADMITTING SOMETHING, SO YOU EXPECT ME TO DO IT ON YOUR SHOW? WAPNER: NO, I'M NOT -- ICAHN: I WOULD LIKE TO ASK YOU A QUESTION. WAPNER: OKAY. ICAHN: IF YOU THINK YOU ARE GOING TO BULLY ME INTO DOING IT. YOU SEEM LIKE A NICE ENOUGH GUY. I'VE NEVER BEEN ON THE SHOW WITH YOU. BUT I DON'T THINK I TAKE FOR BULLYING. SO DO YOU THINK YOU ARE GIVING ME ALL THIS BULLS--T AND MAX MEYERS SAID I COULD SAY WHAT I WANTED ON THE SHOW –SO I AM SAYING IT WAPNER: OKAY, WE WILL SEND MAX THE BILL. ICAHN: …SO YOU BULLY ME AND COME UP AGAINST ME, DO YOU? HEY, LOOK -- WAPNER: WAIT, WAIT, CARL -- LET ME SAY, CARL -- ICAHN: I DON'T LIKE BEING BULLIED. WAPNER: NOBODY HERE -- NOBODY HERE IS BULLYING YOU, FIRST AND FOREMOST. SECOND OF ALL, I SIMPLY ASKED YOU -- LET ME FINISH, PLEASE. I SIMPLY ASKED YOU --I SIMPLY ASKED YOU TO REVEAL WHETHER YOU WERE LONG HERBALIFE, AS THE WORLD WANTS TO KNOW, AND THE MOTIVES BEHIND IT. THAT'S ALL WE WANT TO KNOW. THAT'S WHAT EVERY PERSON WATCHING THIS PROGRAM WANTS TO KNOW. AND IF THAT POSITION IS IN ALL -- ICAHN: CAN I ANSWER? WAPNER: YES. ICAHN: YOU WANT TO KEEP TALKING? WAPNER: NO, PLEASE. ICAHN: I AM GOING TO ANSWER IT FOR YOU. MAX MEYERS CALLED ME UP, HE SAID ACKMAN IS MAKING ALL THESE ASPERSIONS ABOUT YOU. HE'S GOING TO COME ON SAYING YOU ARE THE WORST MAN IN THE WORLD DO YOU WANT TO GO ON TV? I SAID, YEAH, THAT'S WHY I CAME ON. BUT I WILL TELL YOU ABOUT HERBALIFE. I WILL TELL YOU WHAT I WILL TELL YOU AND WHAT I SAID BEFORE. YOU KNOW, I THINK ACKMAN DID HERBALIFE, BECAUSE I -- OBVIOUSLY I DON'T LIKE ACKMAN. ACKMAN IS LYING ABOUT WHAT HAPPENED. I DIDN'T NEED THE $4 MILLION I MADE THERE. WHAT INCENSED ME WAS THAT HE WEASELED OUT OF THE DEAL. WELL LEAVE THAT ALONE. YOU'RE RIGHT. HAPPENED TEN YEARS AGO, LEAVE IT ALONE. HE WEASELED OUT OF IT, I'LL TELL YOU THAT I'M KNOWN AS A TOUGH GUY BUT I THINK IF YOU TAKE MY HANDSHAKE YOU LIVE BY IT. THERE'S NO ONE WILL EVER SAY I WENT BACK ON A HANDSHAKE. LET'S GO BACK TO HERBALIFE. I'M READING AGAIN, WHAT WAS IN THE NEW YORK TIMES, IN THE TIMES IT SAYS, THAT SHE SAYS THAT HE DOES -- THAT UPBEAT RESEARCH. PUBLICATION ABOUT UPBEAT RESEARCH EVEN AS THE FUND WAS QUIETLY SELLING SHARES. THAT'S WHAT HE DID. THAT'S WHAT THE PAPER SAID. AND RIGHT NOW, I BELIEVE – AND I'M NOT GOING TO THE SEC OR FCC, BUT I BELIEVE HE GOES OUT AND HAS 300 PEOPLE IN A ROOM. THIS IS THE TYPICAL ACKMAN. I WOULDN'T CARE IF IT WAS ANYBODY ELSE BUT ACKMAN. BUT HE GOES INTO THE ROOM AND GETS 300 PEOPLE AND TELLS THEM HOW BAD THIS COMPANY IS. IT IS A CLASSIC STUFF. THEY DID IT IN THE 90s. YOU SCARE THE HELL OUT OF PEOPLE. GET THE STOCK DOWN. HE MARKS THE STOCK ON DECEMBER 31st AND MAKE $600 MILLION ON PAPER. AND TELLS THE WORLD HOW GREAT HE IS. HE IS GIVING TO CHARITY AND SHOWS THE WORLD HE HAS MADE 12%. WHICH ISN'T SO GREAT ANYWAY. I WOULD LIKE TO SAY WE MADE 28% LAST YEAR WITHOUT GOING AND HAVING TO GO PUMP AND DUMP STOCKS AND GO AND HAVE ROOMS FULL. OF PEOPLE. AND IN 2011, AT THE RISK OF BEING MODEST WE MADE 33% WITHOUT HAVING TO DO WHAT I CONSIDER TO BE MANIPULATION, OKAY? AND THAT'S WHAT HE DID IN HERBALIFE. AND IF IT WASN'T ACKMAN, I WOULDN'T GIVE A, YOU KNOW, I'M NOT HERE TO CHANGE THE WORLD. BUT THIS IS WHAT HE DID. HE GOT A BUNCH OF INNOCENT INVESTORS, RETIREES, THEY ARE GOING TO LOSE THEIR MONEY SO ACKMAN CAN SHOW A GOOD RECORD AT THE END OF THE YEAR AND BY THE WAY, TOOK AN INORDINATE RISK BECAUSE A COMPANY LIKE HERBALIFE, YOU CAN ASK ALMOST ANY PRO, YOU DON'T GO 20%. AND WHAT THE HELL, HE IS NOT RISKING HIS MONEY, HE IS RISK IS HIS INVESTORS' MONEY. YOU GO IN AND YOU GOT 20% AND IF THERE IS A SQUEEZE, WHICH WELL MIGHT BE IN HERBALIFE, WHAT THE HELL DOES HE DO. I WOULD LIKE HIM TO ANSWER, WHERE DOES HE GET THE STOCK WHEN THEY CALL BACK ALL THE STOCK. LET'S SAY THERE'S TENDER OFFER FOR HERBALIFE AND THEY CALL BACK THE STOCK. IF YOU KNOW, YOU KNOW, WALL STREET, ON A TENDER OFFER, EVERYBODY CALLS BACK THE STOCK YOU BORROWED. IF THAT HAPPENS THAT STOCK COULD RUSH TO A HUNDRED. WHAT THE HELL DOES ACKMAN DO. ASK HIM. HE IS RIGHT HERE ON THE PHONE. ACKMAN: I'M HAPPY TO ANSWER IT. IF I GET A CHANCE TO SPEAK. OKAY, COUPLE OF INTERESTING THINGS. NUMBER ONE -- WAPNER: BILL, LET ME JUST SAY QUICK. WE HAVE TO BE QUICK. BECAUSE WE ARE AT THE END OF OUR ROAD HERE. OKAY. ACKMAN: NUMBER ONE, CARL IS FREE TO MAKE A TENDER OFFER FOR THE COMPANY. CARL YOU WANT TO BID FOR THE COMPANY, GO AHEAD AND BID FOR THE COMPANY. ICAHN: YOU DON'T HAVE TO TELL ME WHAT I'M FREE TO DO. ACKMAN: OKAY, NUMBER ONE. NUMBER TWO, OBVIOUSLY WE DON'T THINK THERE WILL BE A TENDER OFFER FOR THE COMPANY. WE DON'T THINK THE COMPANY IS BUYABLE. WE DON'T THINK ANY PERSON WILL RIGHT WRITE A CHECK FOR 5 OR $6 BILLION TO BUY A BUSINESS WE BELIEVE IS FRAUDULENT. THAT'S NUMBER ONE. NUMBER TWO, CARL ICAHN SAYS HE DOESN'T LIKE THE BEHAVIOR, IT'S BAD. MEANWHILE 2003 AT THE …CONFERENCE IN FRONT OF 500 PEOPLE CARL ICAHN PITCHED TRINITY INDUSTRY WHICH HE WAS SHORT AND SHORT 22% OF OUTSTANDING SHARES ACCORDING TO "FORTUNE" MAGAZINE. CARL CAN YOU TELL US WHETHER THAT IS TRUE OR FALSE. BUT YOU DID PRECISELY THAT SO I FIND IT INTERESTING YOU HAVE A PROBLEM WITH WHAT WE DID IN HERBALIFE. IN HERBALIFE WE SIMPLY PROVIDED TO THE PUBLIC FULL TRANSPARENCY ON THIS INVESTMENT. 330 SLIDES, IN DETAIL, NOT SCARING PEOPLE, BUT GOING THROUGH THE FACTS ON THIS COMPANY. WE DID EXHAUSTIVE RESEARCH OVER A YEAR AND A HALF. AND WE WILL EITHER BE PROVEN RIGHT OR WE WILL BE PROVEN WRONG. WE SHORTED THE STOCK. WE HAVE NOT COVERED OUR SHARES. AND WE HAVE MORE TO COME, BY THE WAY. WE HAVE QUESTIONS. THE COMPANY HAS GIVEN US THE OPPORTUNITY TO ASK AND WE WILL HAVE RESPONSES FOR EVERY ISSUE THEY RAISE AND THEIR RESPONSIVE PRESENTATION TO US AND WHAT I THANK CARL FOR IS HE CERTAINLY HELPED HIGHLIGHT HERBALIFE AND THE ISSUES AT HERBALIFE AND MY GUESS IS THAT CARL BOUGHT HERBALIFE. IF HE DID, BECAUSE THAT'S WHAT SOMEONE IN HIS SHOP LEAKED TO THE PRESS AND HE FLIPPED IT OUT WHEN THE STOCK WENT UP. HE MADE GOOD TRADE. CONGRATULATIONS ON A GOOD TRADE. I DON'T BELIEVE THERE IS ANY GOOD INVESTOR WHO CAN OWN THIS BUSINESS LONG-TERM. WE BELIEVE IT'S A PYRAMID SCHEME WE BELIEVE HE CAN PROVE THAT IT TO A HIGH DEGREE OF CERTAINTY. ICAHN: I APPRECIATE, BILL, THAT YOU CALLED ME A GREAT INVESTOR. I THANK YOU FOR THAT. UNFORTUNATELY, I CAN'T SAY THE SAME FOR YOU. BUT I WOULD LIKE TO ASK YOU, CONGRATULATIONS ON ONE GOOD TRADE. I SORT OF MISSED THAT. WAPNER: GUYS, WE ARE GOING TO END IT THERE. BILL, SO MUCH APPRECIATE YOU COMING ON TODAY. CARL, I HOPE YOU'LL COME BACK. THAT'S ALL I CAN SAY. IT WAS A GOOD CONVERSATION AND IT WASN'T ANYBODY'S -- ICAHN: I DON'T HEAR YOU TELL ME THAT YOU APPRECIATED ME COMING ON. WAPNER: I THINK IT WAS OBVIOUSLY MEANT THERE WHEN I SAID THAT I HOPE YOU WILL COME BACK. ICAHN: ALL RIGHT, THANKS VERY MUCH. I APPRECIATE IT. |
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