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Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations by Tobias E. Carlisle

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Chapter 1The Icahn ManifestoCorporate Raider to Activist Investor

“Had we but world enough, and time,

This coyness, Lady, were no crime . . .

—Andrew Marvell, To His Coy Mistress (c. 1650)

bouleversement \bool-vair-suh-MAWN\, noun:

Complete overthrow; a reversal; an overturning; convulsion; turmoil.

—Comes from French, from Old French bouleverser, “to overturn,” from boule, “ball” (from Latin bulla) + verser, “to overturn” (from Latin versare, from vertere, “to turn”).

Over the fall of 1975, Carl Icahn and his right-hand man, Alfred Kingsley, hashed out a new investment strategy in the cramped offices of Icahn & Company. Located at 25 Broadway, a few steps away from the future site of the Charging Bull, the iconic 7,000-pound bronze sculpture erected by Arturo Di Modica following the 1987 stock market crash, Icahn & Company was then a small, but successful, discount option brokerage with a specialty in arbitrage. Kingsley, a graduate of the Wharton School with a master’s degree in tax from New York University, had joined Icahn in 1968. Immediately impressed by his ability to quickly grasp complex transactions, Icahn had asked Kingsley what he knew about arbitrage. “Not a thing,” Kingsley had replied.1 Soon Kingsley was spending most of his days arbitraging the securities of conglomerates like Litton Industries, LTV, and IT&T. Arbitrage is the practice of simultaneously buying and selling an asset that trades in two or more markets at different prices. In the classic version, ...

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