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CNBC Exclusive: CNBC Transcript: Icahn Enterprises Chairman Carl Icahn Speaks with CNBC’s “Fast Money” Today

WHEN: Today, Thursday, January 20, 2022

WHERE: CNBC's "Fast Money"

Following is the unofficial transcript from a CNBC exclusive interview with Icahn Enterprises Chairman Carl Icahn on CNBC's "Fast Money" (M-F, 5PM-6PM ET) today, Thursday, January 20th in honor of the 15th anniversary of the program. Following is a link to video on CNBC.com: https://www.cnbc.com/video/2022/01/20/fast-15-carl-icahn-breaks-down-his-latest-investments.html.

All references must be sourced to CNBC.

MELISSA LEE: Welcome back to this special edition of "Fast Money" as we mark our 15 years on air. Take a look back at one of our first ever guests, my first ever guests when I took over the show 13 years ago, legendary investor Carl Icahn, Chairman of Icahn Enterprises. This was the two of us back in 2009. We actually extended the set so that he could sit there with us. It was called the sidecar I think. He's back with us now exclusively to help us celebrate. He joins us on the fast line. Welcome back to "Fast Money," Carl. It is great to have you.

CARL ICAHN: Good to be here, Melissa.

LEE: I want to first get your take on—

ICAHN: And congratulations on your anniversary.

LEE: Thanks very much, Carl. It wouldn't be a party without you. I want to get your overall take on where we are in the markets. You said in the past that you think we're, we're headed for massive trouble in this country in the economy. And I'm wondering if the Fed in your view could do anything to avert that massive trouble? I mean it is on the road to tightening at this point.

ICAHN: Yeah, I don't believe that there's necessarily massive trouble coming soon because I don't forget anybody can really know what it's coming but with all the factors, you don't have to really be a genius to understand that if you keep pushing money into the economy the way we have been doing with money velocity today and the balance sheet that you're going to have inflation. I mean it suddenly comes as a surprise. I am surprised it hasn't happened sooner. But I do think that the way it's going there's gonna be problems with inflation and a number of other things, but I certainly don't let it, you know, bother my investment philosophies and activism and I just keep going but I think it's and we keep a pretty big hedge on.

LEE: Right.

ICAHN: But, but eventually, who knows. I think it's gonna be a little tough, but it could be now and it could be three years from now but—

LEE: We're focused on inflation, you know, in the prices that we pay for various things, Carl, but do you think that there are bubbles inflation in other, in other things? I mean do you think that the stock market is inflated? Do you think that there are pockets of the stock market that are inflated?

ICAHN: Yeah, very much so. In other words, I do think that some of the multiples are crazy that some of the investments are just out of this world. I mean, you know, as far as any manageable ratio. So I versus, you know, at Icahn Enterprises where we've been doing this for years and years, I always keep a hedge on but activism still works as a paradigm. It's the best one. But you do have your ups and downs in that too, but happily since well, I can't talk about this quarter yet but for the, for the first three quarters of '21, our net asset value of IEP went up $1.8 billion so we're happy about that. So, and that's and that's with having a lot of hedges on so what happened was that the activists have came to fruition on a number of companies and, you know, in those three quarters.

LEE: Well, we are celebrating 15 years here on the show, Carl, but you've been at this activism business for a long, long time and you're still at it. How, how many years have you been doing this? Because I asked you this because you've said that you think that you might be the last activist out there. You have the luxury of having permanent capital, your own capital to do these long-term battles, and it's going to get more difficult and Gary Gensler, the Chairman of the SEC is looking to shorten the 13D filing window.

ICAHN: Yeah, look, I really think that could be one of the last nails in the coffin. I think the SEC is doing a lot of good things and I think Gary Gensler is doing good things. I think there's a lot of things at Wall Street, that should be cleaned up. There's a lot of abuses, there's no question about it. So, in that sense, I agree with it. But I think activism is very important break on, on corporate America, you know, I really don't think there's corporate democracy. I think you have corporate feudalism. I have said that for years. So yeah, yeah, it's very hard to, you know, get across that moat, you know, and charge in in a feudalistic society that you have, so, it makes no sense to make it tougher and tougher for the activism to work. And with me though, we take big positions, we make tender offers, we have permanent capital, but what you are is killing the smaller activists who, you know, if you don't give him time to accumulate a stock position, you know, up to 10%, up the 15% even up to 5%, you know, if you don't give them why there's no incentive to spend the great deal of money that you have to spend to do a proxy fight to try to get these guys through and I believe me, I've seen it over and over and over firsthand how many of our companies that just terribly run, terribly run and that's why we make so much money over the years. You know, we clean up these companies and, and it's just amazing the abuses that corporate America places on the shareholders at many companies. There are many very good companies and many very good CEOs, but then they are very many bad ones. And I think it's sort of crazy to throw the baby out with the bathwater. I don't get involved in politics, but I may get involved this one too, right. Last time that they were going to do this, I wrote an editorial. I'll probably write another one. But I, I think that if you don't have activism, you don't have accountability. The Business Roundtable is a huge lobby, ironically paid for by the shareholders that are getting abused by them. So, you know, I could go on and on with this. It's silly to go on and on. We do activism and that there's so many companies. I mean, that's why we made a billion that the net asset value went up a billion eight even, even though I was hedged on the technology stocks which are working out a little better today, I guess, but, but it really is a problem. And part of that is that we're not productive. We are not really productive and that's one of the reasons you have inflation and one of the reasons we're not well run the companies and I can attest to it because I've been there so many, so many years. Okay, well, I'll just leave it at that. There's no point talking about it anymore.

KAREN FINERMAN: Carl. Carl, it's Karen Finerman. Thanks for not just being here today but for being here over the years. And you know, I've followed you as an activist from when I, when I was a wee child and you're actually one of, you know, I follow what you do for so long and I found that fascinating. I love your letters. They're entertaining, but I'm wondering given how high the markets are even with this sell off and how difficult it's getting for activists, do you still find that there's places I know you have a couple that you're working on now but you still find there are opportunities for you?

ICAHN: Yeah, you find them because bad corporate management has no time limits. There are plenty of them that are bad. We're working on one now, Southwest Energy, which is a quintessential, a bad quintessential example of what I consider to be bad management, almost abusive management and we're going, you know, we're going after him but, you know, I could afford to wait, we could afford to do a tender offer. And but, but it's really, I wouldn't say criminal because I guess it's legal what they've done but I mean, they went out and I say to avoid somebody challenging, the great spend of spending. I mean, the reg agencies are California and Arizona, you know, I've challenged them quite a bit. Their SG&A has gone up 37% the last four years, and yet they went out and bought a company just recently. There's a company, it's a pipeline. And, you know, the old saying, you know, fools rush in where angels fear to tread. So, in that, in that that area the most anybody would ever pay for this pipeline was a I think it was Buffett at 1.7 billion where there were synergies. There are no synergies here and they just paid 2 billion and I think they did it and we've said it publicly. They did it so they could place stock at a company that the stock was down, I think the utility is a bargain. Obviously, I just made it, we made a tender of 75, the stock was 67 but it's there it's just a terribly run company and yet there's so many barriers to entrance, there's so many barriers they're putting up. But I'm just using that as an example because maybe it's unfair to just pick them out. There are, I go to all these boards, I don't go on the boards, I have people on the boards and it's just unbelievably abusive and the lobby they have just, you know, where it's got a lot of power and it's, it's sort of. Hey Karen, you know, I've been with you and I remember we've been talking about this since you've been on these shows and I think you agree with me to some extent and so I keep doing it because I don't have very much else to do. I am getting old. I play a little tennis and that's pretty tough so and I enjoy doing it but, but if you ask me there, there are always examples for this. Now look, I'll say this it's secular changes come, markets fall apart so you have to have the staying power. I think that's what Melissa just mentioned, where you can't have, you can't have a capital that could be called away from your, you know, two years or one year. Sometimes you have to wait three or four years and Motorola it took three or four years, worked out tremendously well but it took a great deal of time. Reynolds Tobacco we're going way back took four or five years, but you made 10 times your money on the stock there. So, it's just a very fascinating business and it's sad to see that I think the last nail in the coffin of activism are coming on. But what can you do? I mean, I honestly, I'm not here to criticize the SEC against them because I think they've done some really good things but this one I think they're missing completely.

LEE: Right. Carl, it is always a pleasure to speak with you. We wish you many, many, many more years in the activism business and we hope you'll come back on the show.

ICAHN: Okay, great.

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