Icahn loses the Midas Touch
Carl Icahn still hasn’t posted anything on his blog, but the billionaire investor is having no trouble getting his message out. Icahn will appear Sunday night on CBS’ “60 Minutes” to discuss his investment victories, according to a press release from the TV network. The interview with Lesley Stahl finds Icahn shrugging off his failure to force a breakup at Time Warner (TWX), publisher of Fortune, in a 2006 showdown with then-CEO Dick Parsons. “It’s a little bit of he who laughs last,” Icahn tells Stahl. “Maybe I made a mistake, but I made $300 million on it.”
Icahn says he also made $300 million with his recent foray into software company BEA Systems (BEAS), which agreed this year to sell itself to Oracle (ORCL). In that case Icahn appears to have succeeded in spite of himself: BEA held out and got a deal worth $19.38 a share after Icahn scoffed at the company’s decision to reject Oracle’s original offer of $17.
But while Fortune’s Shawn Tully last year dubbed Icahn the shrewdest investor on the planet, it’s clear that recently some of his bets haven’t gone as planned. Motorola (MOT), the struggling handset maker that Icahn recently boosted his stake in, is down sharply since he began building his position in 2007, and Blockbuster (BBI) continues to struggle despite Icahn’s success in booting former chief John Antioco. J.C. Penney (JCP), reportedly another big Icahn holding, dropped 10% Thursday after its latest weak same-store sales performance. It remains to be seen who will laugh last on those picks.
J.C. Penney gets cheaper
J.C. Penney (JCP) shares dropped 10% in trading Thursday after the department store chain posted another sharp decline in same-store sales. The Plano, Texas, company said sales in stores open at least a year fell 6.7% from a year ago in February, compared with the company’s projected low-single-digit decline. “Home categories and the southeast region continue to experience the softest results,” the company said. J.C. Penney said it expects sales this month won’t be quite as bad, with a same-store decline in the low single digits.
But the weak numbers are the latest disappointment at Penney, which has cooled off after the company’s strong growth in 2005 and 2006 caused the stock to double. In January, the company said same-store sales for December fell 7.5%. With the stock off almost 50% from year-ago levels, activist investor Carl Icahn - who recently said he thought retail stocks looked cheap - has started buying, The Wall Street Journal reported last month. If Icahn was buying J.C. Penney at $48 a share, he’ll surely love it at $42.
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