I Make Money Controlling Companies: Carl Icahn
Carl Icahn has a simple investment philosophy: Buy "underperforming" companies and "make things change," he told CNBC Tuesday.
The chairman of Icahn Enterprises said he makes most of his money by controlling companies, not just buying their stocks.
That's why he is in a fight for energy company CVR Energy , which he said in a recent letter was profiting from a quirk in the oil markets, not from management's leadership. He said he is making a fair offer of $30 a share, which the company thinks is too low.
"I bought a bunch of energy companies in 2000, merged them together. I bought them for $300 million and sold for $1.5 billion. It's a great opportunity to control a company like a CVR but CVR has storm clouds ahead" because of the spread between prices for West Texas Intermediate and Brent crude.
"That’s a negative," he said, but for the long term owning the company would be "ok."
The activist investor has another simple philosophy: You can't win them all.
"We got lucky with this activism. It works in spurts," he said.
Shares of many companies he bought with the aim of taking over, including Motorola Solutions, Biogen and Regeneron Pharmaceuticals, went up in value and he was able to sell and make billions of dollars.
However, late last year he withdrew from a proxy fight at Clorox after trying to take over that board and force a sale of the company.
He is not particularly upset about selling his 33 percent stake in Lions Gate Entertainment for $7 a share last year, long before "The Hunger Games" hit movie screens last weekend and earned $155 million in North America.
"We are proud of our performance," Icahn said of his company. "We were up 35 percent" last year. Owning Lions Gate, he added, "would’ve gotten us up to 37 percent."
An earlier version of this article had an incorrect ticker symbol for Regeneron.