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CNBC Transcript: Carl Icahn, Chairman Icahn Enterprises, Discusses His Massive Herbalife Bet on CNBC Today

Friday, 15 Feb 2013 | 4:02 PM ET

WHEN: TODAY, FRIDAY, FEBRUARY 15TH

WHERE: CNBC'S "FAST MONEY HALFTIME REPORT"

In a FIRST ON CNBC interview, Carl Icahn, Chairman Icahn Enterprises, discusses his massive Herbalife bet on CNBC's "Fast Money Halftime Report" today. Following are links to the video of the interview on CNBC.com:

Carl Icahn: Why I'm Betting on Herbalife: http://video.cnbc.com/gallery/?video=3000148406

Icahn on Herbalife: I'm Trying to Make Money: http://video.cnbc.com/gallery/?play=1&video=3000148384

Icahn: Ackman Unfair to Herbalife Shareholders: http://video.cnbc.com/gallery/?play=1&video=3000148305

All references must be sourced to CNBC.

WAPNER: WELCOME BACK THREE WEEKS AGO RIGHT HERE ON CNBC TWO INVESTING TITANS WENT TOE-TO-TOE. BILL ACKMAN SQUARING OFF AGAINST CARL ICAHN ON HERBALIFE AND IN A STUNNING DEVELOPMENT ICAHN TAKING A MASSIVE LONG POSITION IN THE COMPANY. TODAY HE IS BACK TO TALK ABOUT IT. CARL, I'M NOT SURE WE LEFT ON THE GREATEST OF TERMS THE LAST TIME YOU WERE ON. I SAID I WANTED TO HAVE YOU BACK AND I AM CERTAINLY GLAD YOU ARE. WELCOME BACK.

ICAHN: SURE THING SCOTT, RIGHT

WAPNER: WHY DID YOU DO THIS?

ICAHN: WHY DID I DO WHAT?

WAPNER: WHY DID YOU TAKE THE INVESTMENT? WHY DID YOU MAKE SUCH A BIG LONG BET? YOU KNOW WHERE WE ARE GOING

ICAHN: WELL MY BET MIGHT BE LONGER SCOTT. I BUY THINGS THAT I THINK ARE UNDERVALUED. I THINK HERBALIFE IS A VERY UNDERVALUED SITUATION AND WE'VE DONE A HELL OF A LOT OF RESEARCH ON THIS SINCE ACKMAN HAS GIVEN ME THE OPPORTUNITY BY BASHING IT. I THINK IT HAS GIVEN ME A GREAT OPPORTUNITY. AND YOU KNOW FROM THE WAY WE LOOK AT IT WE THINK ACKMAN, WHAT I CONSIDER TO BE A SCHEME AND WE'LL TALK ABOUT IT IS REALLY UNFAIR TO SHAREHOLDERS AND REALLY UNFAIR TO THE PEOPLE WHO ARE WORKING AT HERBALIFE BUT WE'LL GET INTO THAT LATER. BUT YOU KNOW THE FTC INVESTIGATION FOR ONE IT DOES NOT PUT PEOPLE OUT OF WORK. THAT'S NOT WHAT THEY WANT TO DO. ESPECIALLY TO SATISFY GUYS LIKE ACKMAN WHO TO SAY THE LEAST I WOULD SAY SORT OF INSULTS AND TELLS THEM THEY AREN'T DOING THEIR JOB. AND THEY DON'T DO THIS ESPECIALLY WHEN REAL GOOD PRODUCTS ARE BEING SOLD. NOW MY FTC ATTORNEY WHO'S HAD 22 YEARS EXPERIENCE WORKING ON WITH THE FTC IN THE BUREAU OF CONSUMER PROTECTION HAS STATED THE FOLLOWING "HERBALIFE IS A WELL RUN LEGAL MULTI-LEVEL MARKETING COMPANY" THAT MEANS A LOT. NOW I HAVE NOT SEEN I LISTENED TO ACKMAN THE OTHER DAY WHEN HE SPOKE AT THAT CONFERENCE AND I STUDIED THE 300 PAGE PAPER WE HAVE NOT REALLY SEEN ANY EXPERT OPINION IN THAT PAPER. AND THE MOST INTERESTING THING I THOUGHT ABOUT THAT WHOLE CONFERENCE WAS THAT ACKMAN STATED THAT HIS LAWFIRM SULLIVAN CROMWELL WHICH ARE HIS ATTORNEYS AND WHICH WE'VE NEVER HEARD FROM NEVER SEEN ANY EVIDENCE OF SULLIVAN CROMWELL HAS SAID ANY OF THIS. HE SAYS SULLIVAN CROMWELL IS COMFORTABLE THAT HLF IS A PYRAMID SCHEME. I DOUBT THAT YOU KNOW I'M A BETTING MAN AND I WOULD BET AND GIVE ODDS THAT SULLIVAN CROMWELL HAS NEVER SAID THAT PUBLICLY. WE SEE IT THEY NEVER SAID IT PUBLICLY AND I SAY I CHALLENGE ACKMAN WHO KEEPS ON TALKING ABOUT TRANSPARANCY TO BRING OUT SULLIVAN CROMWELL AND HAVE THE SULLIVAN CROMWELL ATTORNEY SAY THAT THIS IS A PYRAMID SCHEME

WAPNER: WELL CARL LET ME ASK YOU ABOUT THE WORK THAT WAS DONE BEFORE MAKING A BIG INVESTMENT LIKE THIS. ACKMAN TIME AND TIME AGAIN MAKES THE CASE THAT HE AND HIS GUYS THERE HAVE SPENT SOME 18 MONTHS GOING OVER HERBALIFE INSIDE THE BUSINESS IN DEEPER WAYS THAN I THINK MANY PEOPLE MAY EXPECT. CAN YOU SHARE WITH US WHAT KIND OF WORK YOU'VE DONE WHAT KIND OF WORK YOUR PEOPLE HAVE DONE BEFORE DECIDING TO MAKE SUCH A SIZEABLE MOVE ON THE OTHER SIDE OF BILL.

ICAHN: WELL FIRST THOUGH I WOULD LIKE TO GO INTO WHAT ACKMAN HAS DONE HERE. I REALLY WANT TO REALLY UNDERSTAND IT. YOU KNOW WHEN YOU LOOK AT THESE THINGS YOU TALK TO EXPERTS WE'VE BEEN DOING IT FOR DECADES I DARE SAY I HAVE ONE OF THE BEST RECORDS IN THE COUNTRY I'M NOT LOOKING TO PAT MYSELF ON THE BACK AND THEREFORE I DON'T THINK I HAVE TO SIT HERE AND DEFEND WHAT WORK I DID. I MEAN THAT IS NOT GERMAINE TO THE SUBJECT ALTHOUGH WE HAVE DONE AN AWFUL LOT OF WORK ON IT. BUT THAT'S NOT GERMAINE TO IT. I MEAN LET'S JUST FOR A MOMENT LOOK AT WHAT ACKMAN IS SAYING AND HOW NON-SENSICAL IT IS. SO ACKMAN HAS COME OUT AND HE SAYS..WELL FIRST I WOULD LIKE TO GET BACK A LITTLE BIT TO SULLIVAN CROMWELL BECAUSE THE FTC WHICH ACKMAN DOESN'T TELL YOU AND MAYBE DOESN'T EVEN KNOW ARE MADE UP OF TWO BUREAUS. CONSUMER PROTECTION AND THE BUREAU OF COMPETITION. HE MENTIONS AND THIS IS VERY IMPORTANT BECAUSE HAVING A LAWYER TELLING YOU THAT HIS IS AN ARKANE LEGAL QUESTION YOU KNOW WHAT IS A PYRAMID SCHEME. HOW MANY PEOPLE ARE SELLING IT? ALL THIS IS A QUESTION THAT ACKMAN HAS BROUGHT UP AND TO ME IT'S A VERY ARKANE QUESTION. YOU NEED A VERY GOOD LAWYER THAT'S KNOWLEDGEABLE IN THIS TELL YOU. WHAT I HEAR FROM MY FTC LAWYER THAT'S ALL HE DOES IS TALK TO THE BUREAU OF CONSUMER PROTECTION AT THE FTC THAT'S THE LAWYER I WANT. SULLIVAN CROMWELL LAWYERS THEY'RE A FINE FIRM BUT THE LAWYER HE MENTIONED THAT WAS ON MICROSOFTS SIDE THAT'S IN A COMPLETELY DIFFERENT AREA OF THE FTC. THAT'S AN ANTITRUST QUESTION SO THEREFORE SO IF YOU LOOK AT THE SULLIVAN CROMWELL WEBSITE IN WASHINGTON YOU SEE THEY DON'T EVEN TALK ABOUT THE BUREAU OF CONSUMER PROTECTION. NOT THE FTC LAWYER THAT YOU WANT HERE.

WAPNER: I UNDERSTAND

ICAHN: LET ME JUST FINISH MY POINT BUT EVEN IF SULLIVAN CROMWELL IS THEIR LAWYER I WANT TO HEAR FROM THAT LAWYER.THE WAY I DO MY RESEARCH I GO TO THE EXPERTS IN ANY AREA. I WANT TO HEAR FROM THE EXPERT HAVING MY PEOPLE GO OVER TO HERBALIFE AND GOING IN AND LOOKING AT IT IS RELATIVELY MEANINGLESS. SOME OF THE GREATEST INVESTMENTS I HAVE EVER MADE I HAVE NEVER SEEN THE COMPANY. I SPEAK TO PEOPLE AND THEN AFTER YEARS AND YEARS YOU GET AN INSTINCT THAT ITS GOOD. I THINK HERBALIFE AND I'LL GET INTO WHY IS A GREAT COMPANY

WAPNER: WHY DO YOU THINK IT IS SUCH A GREAT COMPANY? WELL BECAUSE YOU'VE GOT A GUY ON THE OTHER SIDE OF YOU CARL WHO SAYS IT IS A PIECE OF GARBAGE. THAT IT'S GOING TO ZERO AND YET YOU'VE GOT SUCH CONVICTION ON THE OTHER SIDE OF THAT ARGUMENT. SHARE WITH US WHY.

ICAHN: OK. I WILL TELL YOU THAT HERBALIFE IS AT THE CENTER OF PARADIGM SHIFT RIGHT NOW. MULTI-MARKET LEVELING IS HERE TO STAY. LEVELS OF MULTI-LEVEL MARKETING IS WHAT I CONSIDER TO BE A GREAT WAY TO RETAIL PRODUCTS. AND THE REASON THAT I BELIEVE IT IS DOING WELL IN 87 MARKETS IS THAT YOU HAVE A SECULAR CHANGE. THE THIRD WORLD THAT'S BUILDING UP AND HAS A MIDDLE CLASS IS STARTING TO HAVE A MIDDLE CLASS, DOES NOT HAVE THE RETAIL SYSTEM AND OUTLETS THAT YOU HAVE HERE IN THIS COUNTRY. HERBALIFE GIVES THEM A SUPPORT NETWORK. HERBALIFE MAKES A PRODUCT AND IT IS AT THE FOREFRONT OF OBESITY. TO ME, OBESITY AND NUTRITION ARE ONE OF THE GROWTH AREAS. YOU HAVE PEOPLE THAT ARE OUT OF WORK, THAT HERBALIFE GIVES A CHANCE TO MAKE MONEY. UNLIKE WHAT ACKMAN IS SAYING, YOU KNOW, ACKMAN WEARS THE MANTLE THAT AREN'T HELPING ALL THESE PEOPLE, HE'S HURTING THEM. HE IS PUTTING THEM OUT OF WORK. HERBALIFE GIVES PEOPLE AN OPPORTUNITY TO MAKE MONEY AND THAT IS GOING TO GROW. THE CONCEPT OF SELLING INTO 87 COUNTRIES, I THINK, IS GOING TO CONTINUE TO GROW, DESPITE ACKMAN AND IT IS AT THE FOREFRONT OF WHAT I CONSIDER TO BE A PARADIGM SHIFT. ON THE ONE HAND, YOU HAVE PEOPLE MUCH MORE INTERESTED IN OBESITY, MUCH MORE INTERESTED IN NUTRITION. ON THE OTHER HAND, YOU HAVE THE INTERNET. AND THE INTERNET MAKES IT EASIER FOR THESE POOR PEOPLE TO GET IN CONTACT WITH A NUMBER OF PEOPLE IN THEIR COUNTRIES OR IN RURAL AMERICA, OR IN THIS COUNTRY. ON THE INTERNET, YOU CAN GET IN TOUCH WITH YOUR FRIENDS, IN TOUCH WITH YOUR NEIGHBORS, IN TOUCH WITH PEOPLE YOU TALK TO VERY EASILY. I SEE IT AS A GROWTH. ACTUALLY, HERBALIFE IS GROWING. THE NUMBERS ARE GROWING. AND YOU ARE BUYING IT VERY CHEAPLY THANKS TO ACKMAN. ACKMAN'S GIVEN ME A GREAT OPPORTUNITY.

WAPNER: ARE YOU WORRIED ON ANY LEVEL THAT HE'S GOT SOMETHING? THAT HE KNOWS SOMETHING? I MEAN JUST TO ASSUME, JUST BECAUSE HIS – SULLIVAN AND CROMWELL MAY HAVE BEEN SPEAKING WITH HIM, WHAT IF HE HAS ALSO SPOKEN WITH REGULATORS? WHAT IF HE HAS SPOKEN WITH OTHER PEOPLE WHO USED TO WORK FOR THE COMPANY?

ICAHN: I'LL TELL YOU ONE THING, WHICH IS AMAZING TO ME –

WAPNER: I MEAN HE HAS MADE A HUGE HUGE SHORT BET. SO YOU'VE GOT TO BELIEVE THAT HIS CONVICTION LAY SOMEWHERE.

ICAHN: I DON'T BELIEVE IT. YOU KNOW, I BELIEVE, THIS IS MY BELIEF. THIS IS AN ACKMAN SCHEME. HE'S DONE IT BEFORE WHERE YOU COME IN AT THE END OF THE YEAR AND YOU GO IN AND YOU TRY TO MAKE A MAJOR KILLING. SO YOU GO IN. YOU KNOW, LETS GET IT STRAIGHT. YOU HAVE A BUNCH OF GUYS WORKING FOR ACKMAN, MAYBE THEY ARE HARVARD MBAs, MAYBE THEY ARE NOT. PUTTING A 300 PAGE PAPER TOGETHER IS NOTHING. YOU PUT SOMETHING TOGETHER AND SAY I'VE GOT A 300 PAGE PAPER. YOU KNOW, I'VE SHORTED STOCK, BUT THE WAY YOU SHORT STOCK – AND YOU CAN ASK ANY PRO IN THIS – IS YOU KEEP IT QUIET. YOU DON'T WANT PEOPLE TO KNOW IT BECAUSE A SHORT POSITION IS VERY DANGEROUS. IF YOU HAVE A MAJOR SHORT POSITION, I TRIED TO KEEP MY CONSECO SHORT QUIET FOR YEARS AND I MADE A GREAT DEAL OF MONEY ON IT. BUT WHAT IS HE DOING? HE GOES IN, HE HAS THIS – I CALL IT A SCHEME – AND WHAT HE DOES IS HE PUTS ON A 300 PAGE PAPER WITH DRAWINGS AND ALL THAT CRAP ON IT, BUT WITH NO REAL EXPERTISE. AND NOW YOU SAY THIS COMPANY IS NO GOOD. AND BY THE WAY, SUDDENLY, I'M ACKMAN, I'M WEARING THIS GREAT MANTLE AND FTC, YOU BETTER PUT THESE PEOPLE OUT OF WORK. AND YOU KNOW THE WAY THE FTC WORKS IS EVEN..THE FTC IT MOVES QUITE SLOWLY IT LOOKS FOR FRAUD AND THEN IN MANY OF THESE SITUATIONS WHERE YOU DO HAVE A PRODUCT WHEN IT IS NOT COMPLETELY FRAUDULENT AND THERE ARE THESE MULTI-LEVEL MARKETING THAT THERE ARE FRAUDULENT BECAUSE THEY DON'T SELL A PRODUCT BUT THIS COMPANY WITHOUT QUESTION EVEN ACKMAN WILL AGREE IT DOES SELL A GOOD PRODUCT.

WAPNER: LET ME ASK YOU I AM LOOKING RIGHT AT THE 13D I'M HOLDING IT UP IN FRONT OF THE CAMERA HERE THERE'S AN ITEM 4 WHICH SAYS PURPOSE OF TRANSACTION WHAT'S THE REAL PURPOSE OF THIS TRANSACTION IN YOUR WORDS? IS THIS REALLY BUSINESS OR IS IT PERSONAL? CAUSE IT SURE SOUNDS PERSONAL.

ICAHN: I WILL TELL YOU SOMETHING SCOTT I DIDN'T MAKE ALL THIS MONEY AND YOU KNOW OUR RECORD AND I'LL TALK ABOUT OUR RECORD AGAIN AT THE RISK OF BEING MODEST JUST TO BRING IT ACROSS IF YOU BOUGHT IEP, MY COMPANY AND THIS IS JUST ONE ASPECT. YOU COULD HAVE BOUGHT IT AT $8, $7.90 IN 2000 SINCE THAT TIME MY STOCK IS UP 900% AND DURING THAT PERIOD THE S&P I THINK IS UP ONLY 2 OR 3%. WE HAVE I THINK IS PROBABLY ONE OF THE BEST RECORDS IF NOT IN THE WORLD FOR A BIG COMPANY LIKE THIS

WAPNER: AND I DON'T THINK ANYONE WOULD ARGUE WITH THAT BUT I CERTAINLY

ICAHN: ALRIGHT I WILL ANSWER THE QUESTION THEN

WAPNER: GO AHEAD

ICAHN: I DON'T LIKE ACKMAN EVERYBODY KNOWS THAT I DON'T RESPECT HIM EVERYBODY KNOWS THAT AND ACTUALLY I THANK HIM FOR CALLING ME A GREAT INVESTOR SO I THINK THAT COMES TO THE POINT. I DO NOT AS A GREAT INVESTOR THAT'S WHAT HE IS CALLING ME BUY THINGS JUST TO GET EVEN WITH ANYBODY. I AM NOT BUYING THIS COMPANY AND PUTTING MONEY INTO IT UNLESS I'VE DONE A LOT OF RESEARCH ON IT AND BELIEVE IN IT OK. THE FACT THAT ACKMAN IS SHORT AND FORGET THAT I DON'T LIKE HIM THE FACT THAT YOU HAVE A MAJOR SHORT POSITION ONE OF THE INDICES I LOOK AT WHEN I BUY SOMETHING.

WAPNER: SURE

ICAHN: THE BIGGER THE SHORT POSITION IN A COMPANY THE MORE ENTICING IT IS OR ITS ONE OF THE QUALIFICATIONS OR CAN BE A QUALIFICATION. COMPANY HLF DOESN'T EVEN NEED THAT. I THINK YOU LOOK AT IT IT'S A BROKE COMPANY MAKING FREE CASH FLOW 7 0R 800 MILLION IT'S A GREAT COMPANY TO TAKE PRIVATE. THIS IS THE PERFECT QUINTESSENTIAL EXAMPLE OF A COMPANY THAT SHOULD BE TAKEN PRIVATE. IT HAS A HIGH CASH FLOW, IT HAS STEADY GROWTH INCOME, LOW CAP X, FAVORED VALUATION THANKS TO ACKMAN YOU COULD LEVERAGE IT EASY TODAY AND I THINK THAT IS AN AREA THIS COMPANY SHOULD BE LOOKING AT. I'M NOT RUNNING THE COMPANY BUT I SAID THAT IN MY 13D. I THINK THERE IS A GREAT DEAL OF MONEY TO BE MADE HERE. BECAUSE I THINK THIS IS ON THE VERGE OF A LOOK SIX MONTHS AGO I BOUGHT CVI WHEN NOBODY LIKED IT. IT WAS THE REFINERY IT ALSO WAS ON THE VERGE OF A SECULAR CHANGE AND AGAIN AT THE RISK OF BEING MODEST WE'RE UP CLOSE TO 2 BILLION DOLLARS ON THAT NOW. I THINK THIS IS IN THE SAME SITUATION.

WAPNER: I THINK IT IS-- YOU KNOW I ASK YOU THE QUESTION BUSINESS VERSUS PERSONAL BECAUSE I THINK IF YOU WOULD LOOK AT THE FILING HERE, AND YOU WOULD LOOK AT THE SOME OF THE TIMING OF THE PURCHASES OF STOCK AND SOME OF THE OPTIONS ACTIVITY AS WELL, I MEAN YOU CERTAINLY HAVE TO TAKE NOTE OF THE FACT THAT YOU STARTED TO REALLY ACCUMULATE THE LARGEST PORTION OF YOUR POSITION AFTER WE HAD THIS BATTLE OF THE CENTURY SOME THREE WEEKS AGO TODAY LEADING ONE TO ASK THE QUESTION THAT THIS MUST BE SOMEWHAT PERSONAL CARL AS MUCH AS YOU WANT TO MAKE MONEY.

ICAHN: LET ME ADDRESS THAT. IF YOU LOOK AT MY BUYING PATTERN, YOU WOULD SAY IT IS NOT PERSONAL. I BOUGHT THE STOCK. I THOUGHT IT WAS CHEAP. YOU KNOW WHERE I BOUGHT IN THE LOW 30s. WHEN THE STOCK RAN UP TO THE 40s I NEVER BOUGHT A SHARE. I HAVE NOT BOUGHT A SHARE IN THAT STOCK UNTIL IT WENT DOWN AGAIN THANKS TO ACKMAN. SO I DID NOT BUY THAT STOCK IN THE 40s. IN FACT, YOU KNOW, I SAW THAT DAN LOEB BOUGHT IT AND I SAID TO MYSELF WELL HE GOT IN THERE AHEAD ME AND I'M JUST GOING TO FORGET IT AND THAT WAS EVEN AFTER THE CONFRONTATION. IT WENT DOWN AND THAT'S WHEN I BOUGHT IT. IF YOU NOTICE, MY AVERAGE PRICE IS 36, WHICH IS PRETTY GOOD WHEN YOU ARE ACCUMULATING 14 MILLION SHARES.

WAPNER: SO ARE YOU THEN—CAN I SURMISE THEN FROM WHAT YOU ARE SAYING THAT, DO YOU SEE REAL VALUE HERE AND THIS IS IN NO WAY AN ATTEMPT TO SQUEEZE THE YOU-KNOW-WHAT-OUT OF ACKMAN?

ICAHN: WELL, LET'S SAY TWO THINGS. THE VALUE IS HERE. I THINK IT'S GREAT VALUE. I'M NOT GOING LIE TO YOU AND SAY THAT IF ACKMAN GETS SQUEEZED I'LL FEEL VERY SORRY AND GO AND CRY AND DO PENITENCE. BUT THAT'S NOT THE REASON THAT I'M DOING THIS. I'M DOING THIS TO MAKE MONEY. THAT'S WHAT I DO. THE FACT THAT I DON'T LIKE ACKMAN YOU CAN SAY MAYBE IS THE STRAWBERRY ON TOP OF THE ICE CREAM. BUT I AM SAYING TO YOU THAT THIS IS NOT DONE TO SQUEEZE ACKMAN OR SQUEEZE ANYBODY. HOWEVER, IT MUST BE UNDERSTOOD, WHEN SOMEBODY GOES OUT AND SHORTS 20 PERCENT OF A STOCK AND MAKES THAT VERY PUBLIC—I'VE SAID THIS BEFORE, MY OPINION THAT'S A HUGE, HUGE RISK AND THAT'S MY OPINION. IF SOMEBODY WANTS TO LIVE BY THE SWORD, HEY, THE OLD SAYING, YOU DIE BY THE SWORD.

WAPNER: BUT THERE ARE THOSE ON THE OTHER SIDE WHO WOULD LOOK AT THE WAY YOU'VE SORT OF STRUCTURED THIS INVESTMENT, YOU KNOW, OBVIOUSLY THE HEADLINE WOULD BE 13 PERCENT STAKE BUT IN REALITY THE PORTION THAT IS TRADITIONAL STOCK IS MUCH SMALLER POSITION THAN THAT OR A MUCH SMALLER PERCENTAGE OF THAT WHILE A LARGE PORTION IS THROUGH OPTIONS, WHICH CAN BE VIEWED AS RISKY AND SOMEWHAT SPECULATIVE ON YOUR PART, WOULD YOU AGREE?

ICAHN: NO. YOU'RE REALLY MISSTATING THAT COMPLETELY. WE HAVE OPTIONS AT THIS POINT THAT ARE GOING TO BE TURNED INTO STOCK IN THE NEXT 30 DAYS BECAUSE WE WENT IN AND ENDED UP GETTING PERMISSION TO…FROM THE FTC. IN OTHER WORDS, WE ONLY HAVE OPTIONS FOR ONE REASON. WE HAVE PLENTY OF CASH AROUND BECAUSE YOU CAN'T HAVE MORE THAN CERTAIN AMOUNT OF STOCK, YOU KNOW FI-- MILLION DOLLARS WORTH UNTIL YOU GET CLEARANCE FROM THE FTC SO WE ARE GETTING CLEARANCE AS WE SPEAK. AND ALL THOSE OPTIONS ARE GOING TO BE TURNED INTO STOCK SO THIS OPTION HAS NOTHING TO DO—I DON'T EVEN KNOW WHAT YOU ARE SAYING, SCOTT. WHAT ARE YOU SAYING ABOUT THE OPTIONS? I DON'T EVEN UNDERSTAND WHAT YOU ARE SAYING.

WAPNER: WELL, I MEAN, YOU'VE BOUGHT CALLS AND SOLD PUTS SO ESSENTIALLY YOU ARE MAKING A DOUBLE BULLISH BET IF YOU WILL. BOTH OF THOSE ARE BULLISH SIGNS ON WHAT YOU THINK THE STOCK IS GOING TO DO—

ICAHN: BUYING A CALL AND SELLING A PUT AS YOU KNOW IS LIKE OWNING STOCK, RIGHT? IT'S THE SAME THING.

WAPNER: IT'S A BULLISH BET. HOWEVER—

ICAHN: OWNING A CALL AND—BUYING A CALLING AND SELLING A PUT IS SIMPLY BUYING THE STOCK.

WAPNER: WELL IF THE NEWS GOES BAD CARL DON'T YOU RISK LOSING ALL OF THE MONEY ON THOSE INVESTMENTS?

ICAHN: I RISK LOSING—YOU REALLY SHOULD THINK OF THIS, AND I'LL MAKE IT REAL SIMPLE, YOU SHOULD THINK OF THIS AS I OWN $14 MILLION WORTH OF STOCK. THAT'S MY RISK. IF THE STOCK GOES TO ZERO, MULTIPLE THE 14 MILLION BY THE 36 THAT I PAID, THAT'S WHAT I LOST.

WAPNER: WHAT HAPPENS IF REGULATORS COME OUT ON THE SIDE OF ACKMAN SO TO SPEAK? WHAT HAPPENS IF THEY LAUNCH ANY KIND OF INVESTIGATION? WHETHER IT'S THE FTC, ATTORNEY'S GENERAL IN ANY NUMBER OF STATES THAT MAY OR MAY NOT BE LOOKING AT THIS ISSUE AS WE SIT HERE AND HAVE THIS CONVERSATION TODAY.

ICAHN: LOOK IT—I DO NOT BELIEVE THAT THE REGULATORS ARE GOING TO ACT BECAUSE I GUY COMES OUT AND SAYS YOU'RE NOT DOING YOUR JOB PROPERLY AND YOU BETTER GETTING MOVING ON THIS. THIS COMPANY'S BEEN AROUND FOR 30 YEARS AND THEY'RE NOT WAITING FOR ACKMAN TO TELL THEM WHAT TO DO. AND BY THE WAY, I LOOK AT ACKMAN'S ARGUMENTS, AND TO ME, THEY ARE COMPLETELY AMATEURISH. THERE IS NO PROFESSIONAL BACKING OF THEM. I'D LIKE TO HEAR FROM SULLIVAN & CROMWELL, IF INDEED SULLIVAN & CROMWELL HAVE LOOKED AT IT. HE SAYS SULLIVAN & CROMWELL SAYS THAT THIS IS A PYRAMID SCHEME. I DOUBT THAT. I WOULD BET THAT THEY NEVER SAID THAT. SO I DON'T THINK THE FTC COMES IN, BUT IF THEY DO EVEN, AS THEY'VE DONE IN CASES, THEY DO COME IN, THIS ISN'T A BINARY THING LIKE ACKMAN WOULD HAVE YOU BELIEVE. THAT ALL I NEED IS ONE INVESTIGATOR AND THIS COMPANY IS SHUT DOWN. THAT'S NOT WHAT HAPPENS. THAT'S NOT WHAT HAPPENS WITH THE FTC WHEN YOU HAVE A GOOD PRODUCT. SO MY FEELING IS EVEN IF THAT HAPPENS, WHICH I DOUBT IT WILL, THERE'LL BE, EVENTUALLY THE WORST CASE, THERE'LL BE A SETTLEMENT. AND THE COMPANY WILL STILL SURVIVE. IT MIGHT GO DOWN A LITTLE BIT, MY STOCK WILL GO DOWN—LISTEN I'VE BEEN IN COMPANIES STOCKS HAVE GONE DOWN THAT I OWN. HAPPENED TO ME MANY TIMES. BUT I DON'T THINK THAT'S GOING TO HAPPEN HERE. I THINK THIS COMPANY—LOOK, I'VE SAID IT BEFORE, THIS COMPANY IS A VERY UNDERVALUED SITUATION.

WAPNER: WOULD YOU CONSIDER MAKING A TENDER OFFER FOR THE SHARES?

ICAHN: YOU KNOW, I'M NOT GOING TO GET INTO THAT WITH YOU, SCOTT. YOU KNOW, WHAT I'M GOING TO DO IS TALK TO THE COMPANY AS I HAVE. I TALKED TO MICHAEL JOHNSON YESTERDAY. WE INTEND TO TALK AGAIN. I'VE TALKED TO OTHER PEOPLE INVOLVED WITH MICHAEL JOHNSON AND WHAT'S GOING TO HAPPEN, I DON'T KNOW MYSELF BECAUSE IT'S THEIR COMPANY, NOT MINE. I HAVE SOME IDEAS. I PUT THEM IN THE 13D. I SAID IN THE 13D WE ARE GOING TO TALK ABOUT RESTRICTING POSSIBLY. WE ARE GOING TO TALK ABOUT GOING PRIVATE POSSIBLY.

WAPNER: THAT WOULD POTENTIALLY THOUGH CREATE THE MOTHER OF ALL SHORT SQUEEZES, WOULD IT NOT? A PHRASE THAT YOU MENTIONED THE LAST TIME THAT WE HAD THIS DISCUSSION?

ICAHN: HEY, HEY, YOU CAN SAY THAT. I DON'T WANT TO SAY THAT. YOU CAN TALK ABOUT, YEAH. LAST TIME WE GOT INTO A BIT OF A HEATED DISCUSSION AND I'M NOT THE ONE SAYING THAT NOW, THEY ARE SAYING THAT. I WANT TO YOU KNOW REALLY MAKE THIS CLEAR THIS IS NOT SOMETHING ABOUT GETTING ACKMAN INTO A SHORT SQUEEZE. HE GOT HIMSELF INTO THAT IF THAT HAPPENS. I AM BUYING A SITUATION THAT I THINK IS VERY CHEAP. CAN I BE WRONG? SURE, I'VE BEEN WRONG BEFORE. BUT I REALLY DON'T THINK I'M GOING TO BE WRONG IN THIS SITUATION AND THAT'S ALL I CAN SAY.

WAPNER: WHEN I TELL YOU THAT WHEN I SPOKE TO HIM PERSONALLY HE SOUNDED AS RESOLUTE AS EVER THAT HE WASN'T IN ANYWAY READY TO BACK DOWN CARL.

ICAHN: HEY, I CAN ONLY SAY ONE THING, I'M SURE HE WAS RESOLUTE ABOUT TARGET. I'M SURE HE WAS RESOLUTE ABOUT JCPENNY. HE'S BEEN RESOLUTE, HE'S THAT KIND OF GUY. HE'S—I'M NOT SAYING IT'S BAD, HE'S SORT OF RIGID. I'VE SEEN MANY PERSONALITIES LIKE THAT, THEY CAN MAKE A LOT OF MONEY BUT THEY SURE AS HELL CAN LOSE. AND IT IS NOTHING AGAINST ACKMAN. I'M REALLY NOT-- I REALLY DON'T WANT THIS TO BE…WITH ACKMAN AT ALL. LOOK, ACKMAN AND I HAVE HAD OUR DISPUTE. WE HAD IT, AS FAR AS I'M CONCERNED, I DON'T WANT TO GET BACK INTO THAT. I TOLD YOU HOW I FELT ABOUT HIM AND REALLY THIS IS ABOUT MAKING MONEY. I'M SURE IT'S ABOUT MAKING MONEY FOR HIM. I'M SURE HE DOES HONESTLY BELIEVE HE'S RIGHT. AND IT'S JUST GOING TO COME OUT TO SEE WHO'S THE GUY THAT'S RIGHT.

WAPNER: CAN I ASK, HAVE YOU SPOKEN WITH DAN LOEB?

ICAHN: I HAVE NOT SPOKEN TO DAN I'D SAY FOR THREE WEEKS OR A MONTH

WAPNER: HAVE YOU SPOKEN WITH BOB CHAPMAN?

ICAHN: I HAVE NOT

WAPNER: LET ME JUST QUICKLY ASK YOU BEFORE WE GO CARL, YOU KNOW IN THE FILING YOU SAY AND THESE ARE YOUR WORDS OR THE FILINGS WORDS, IF YOU WILL, REGARDING THAT YOU WANT TO MEET WITH MANAGEMENT REGARDING THE BUSINESS AND STRATEGIC ALTERNATIVES TO ENHANCE SHAREHOLDER VALUE. YOU ARE AN AGITATOR, RIGHT? I MEAN, I THINK YOU'D SORT OF ADMIT THAT. IT'S KIND OF WHAT YOU DO. YOU'VE MENTIONED A GO PRIVATE TRANSACTION AS ONE POSSIBILITY, A LEVERAGED RECAP. IS THERE ANY CONCERN THAT A BANK WOULD BE UNWILLING TO PUT UP ANY KIND OF MONEY TOWARDS SOMETHING LIKE THAT GIVEN THE CONTROVERSY SWIRLING AROUND HERBALIFE OR ANY THAT ANY OTHER PARTY WOULD EITHER?

ICAHN: LOOK, YOU SAID AN AWFUL LOT THERE SCOTT. YOU SAID I'M AN AGITATOR.

WAPNER: WELL ACTIVIST, AGITATOR, THEY ARE ALMOST ONE IN THE SAME--

ICAHN: I THINK I'VE GOTTEN ALONG WITH A LOT OF COMPANIES MORE THAN YOU CAN IMAGINE AND WE'VE WORKED TOGETHER WITH A NUMBER OF THEM AND WE HAVE A LOT OF VERY, VERY SUCCESSFUL COMPANIES IN MY STABLE SO TO SPEAK. SO I THINK WE WOULD DEFINITELY IN THIS KIND OF A SITUATION WE DEFINITELY GET CAPITAL IF WE NEEDED IT.

WAPNER: HAVE YOU HAD ANY CONVERSATIONS WITH ANY PRIVATE EQUITY FIRMS? ANYBODY THAT WE NEED TO KNOW ABOUT?

ICAHN: YOU SOUND LIKE YOU ARE THE SEC AND I'M IN A DEPOSITION.

WAPNER: IT'S JUST YOU AND ME HAVING A CONVERSATION CARL, IT'S LIKE OLD FRIENDS.

ICAHN: YOU CALLED ME UP, YOU REALLY WANTED ME ON, I'M HERE SPEAKING… I'M NOT GOING ANSWER QUESTIONS— YOU CAN IMAGINE I'VE SPOKEN TO—YOU CAN IMAGINE I'VE HAD CALLS FROM A NUMBER OF INVESTMENT BANKERS AND PEOPLE WITH CAPITAL. WE HAVE PLENTY OF CAPITAL OURSELVES. BUT I'M NOT LISTEN—I'M ONLY SAYING WHAT I SAID IN THE 13D AND WHAT I FEEL I SHOULD DISCLOSE. AND IF YOU ARE ASKING ME DO I THINK THIS SHOULD BE A PRIVATE EQUITY DEAL? I PERSONALLY THINK—I SAID PRIVATE EQUITY, I DON'T THINK YOU NEED A PRIVATE EQUITY FIRM FOR THIS. I MEAN, IF YOU LOOK AT OUR CAPITAL WE HAVE AS MUCH AS ANY PRIVATE EQUITY FIRMS SO I'M NOT SAYING THIS HAS TO BE A PRIVATE EQUITY FIRM THAT COMES IN. IF YOU THINK YOU NEED LEVERAGE FOR THIS, I MEAN YOU LOOK AT THIS COMPANIES BALANCE SHEET. THERE'S NOT MUCH DEBT ON IT AND IT MAKES A HELL OF A LOT OF INCOME. THE FACT THAT YOU HAVE A GUY NAMED ACKMAN TELLING PEOPLE IT'S NO GOOD—I DON'T THINK THAT ADDS A LOT OF NEGATIVITY TO IT. I MEAN THIS COMPANY WASN'T—IT'S WHAT IT WAS BEFORE ACKMAN DECIDED TO GO ON THIS RAMPAGE AND TELL EVERYBODY IT'S TERRIBLE. AND BY THE WAY, THAT RAMPAGE-- I DON'T EVEN HOLD IT AGAINST HIM, BUT THAT RAMPAGE HELPS ACKMAN TO MAKE A PROFIT AND SUDDENLY ACKMAN, IF HE REALLY WINS IN THAT RAMPAGE PUTTING THOUSANDS OF POOR PEOPLE OUT OF WORK, SO TO SPEAK, INSTEAD OF HAVING THE MANTRA OF LOOK HOW GREAT I AM, LOOK I'M THE SAVIOR. HE SHOULD BE SO TO SPEAK IN THIS SITUATION, THE DEVIL NOT THE SAVIOR. AGAIN THOUGH ACKMAN'S DOING WHAT HE DOES. HE'S OUT THERE HE WANTS TO MAKE MONEY FOR HIS FIRM AND I SAY HE SAW THIS AS AN OPPORTUNITY. AND BY THE WAY, THAT'S NOT BAD OR GOOD. THAT'S WHAT IT IS.

WAPNER: LET'S END IT THIS WAY CARL, I KNOW THAT BILL ACKMAN IS WATCHING RIGHT NOW. AS WE END THIS, IS THERE ANYTHING YOU WANT TO SAY DIRECTLY MR. ACKMAN?

ICAHN: NO, YOU KNOW, THIS IS NOT AN AD HOMINEM; IT REALLY ISN'T A PERSONAL THING. I'M BASICALLY, IN MY OPINION, ACKMAN TOOK A SHOT, THIS WAS A WAY HE WAS GOING TO MAKE MONEY. MY OPINION, THIS ISN'T ABOUT ARE YOU A BAD GUY, ARE YOU A GOOD GUY. HE'S DOING WHAT HE DOES, HE'S TRYING TO MAKE MONEY. I THINK HE'S WRONG. HE OBVIOUSLY THINKS I'M WRONG. AND YOU KNOW AT THE END ONLY TIME WILL TELL.

WAPNER: CARL THAT'S AS GOOD A PLACE AS ANY TO LEAVE THIS CONVERSATION. THANKS SO MUCH FOR COMING BACK AND SPENDING SOME TIME WITH US. I KNOW EVERYBODY'S GRATEFUL TO HEAR FROM YOU AFTER WHAT WAS A STUNNING RELEASE LAST NIGHT OF THE POSITION YOU'VE TAKEN IN HERBALIFE. WE'LL SEE WHERE IT ALL GOES. CARL ICAHN THANKS SO MUCH.


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