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Stop Trading!: Icahn on Investing

Wednesday, 16 Jan 2008 | 5:02 PM ET

BEA Systems finally accepted a buyout offer from Oracle Wednesday, thanks in large part to the shuttle diplomacy of Carl Icahn, the activist investor told Cramer during Stop Trading!.

Stop Trading, Listen to Cramer
Mad Money host Jim Cramer talks stock with billionaire investor Carl Icahn.

Icahn, who had been pushing for the deal, worked hard to bring the two sides together after BEA Systems rejected Oracle’s initial bid. Now, Oracle has agreed to pay $8.5 billion for the “middleware” software company. As BEA System’s largest shareholder, owning 13%, Icahn stands to earn a healthy chunk of that.

And the legendary investor has to take his money where he can get it, especially in this environment. Icahn admitted he’s not as bullish as Cramer, saying that we might see “some more blood on the streets before this gets settled out.” Still, “there are some great bargains around.”

Icahn’s interest in Motorola is no secret, and over the long term he said it’s a “four-star” company. He’d just like to see the cell-phone division spun off. “When you buy Motorola, you’re buying that cell-phone business for nothing,” he said.

The conversation then switched to WCI Communities , a Florida real-estate developer Icahn bought into a year ago that could be facing bankruptcy, reports say. But he doesn’t think so. Like all of his investments, “it takes time” for business to turn up, Icahn said.

Icahn also has his hands in the commercial real estate, but “without question, you have to worry about” it, he said. He uses derivatives and short selling to take advantage of the situation. Apparently, the sector has the same problem as residential housing: bad mortgages.

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