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When Carl Icahn Ran a Company: The Story of TWA

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Re: When Carl Icahn Ran a Company: The Story of TWA

#91

Post by Spooky23 »

jcampbell1 wrote: post #10

For those that don't know what is going on, here is the backstory: Carl Icahn has recently bought a bunch of ebay stock. He has claimed the company is mismanaged. He has also personally attacked Marc Andreesen. Here is the accusation from Ichan: 1) Marc Andreesen was/is on ebay's board. 2) While on ebay's board, Marc bought most of Skype from eBay. 3) He flipped Skype to Microsoft in less than 2 years, earning himsel…

I hate to agree with Ichan, but eBay is probably one of the worst run brands ever. 15 years ago, my grandparents were excited about buying and selling crap on eBay, and they know nothing about technology.

Nowadays, it's a place to get ripped off. I have to say that I haven't even thought about eBay for many months.

Re: When Carl Icahn Ran a Company: The Story of TWA

#94

Post by factman »

jcampbell1 wrote: post #10

For those that don't know what is going on, here is the backstory: Carl Icahn has recently bought a bunch of ebay stock. He has claimed the company is mismanaged. He has also personally attacked Marc Andreesen. Here is the accusation from Ichan: 1) Marc Andreesen was/is on ebay's board. 2) While on ebay's board, Marc bought most of Skype from eBay. 3) He flipped Skype to Microsoft in less than 2 years, earning himsel…

Pretty unlikely when a fund invests 1/6th of its total capital in a single deal, the namesake of the fund is not intimately involved. Most funds have a cap of 10% of total equity in a single deal to avoid concentration risk and even if this was 15% for a16z, they were still above this limit.

Note: since this $300MM fund, a16z has gone on to raise enormous funds many multiples of the size.

Re: When Carl Icahn Ran a Company: The Story of TWA

#95

Post by dpcheng2003 »

argumentum wrote: post #85
dpcheng2003 wrote: post #80

Earlier quoted context omitted.

Who said anything about funding new companies? We're talking about leverage and wealth generation. Big AUM means bigger fees. Non-VC funds like hedge funds and private equity are incentivized to have huge funds because they get the fees. Since most of their work is financial engineering, more AUM means more leverage and is an advantage. Large VC funds are disadvantaged because they're investing in growth. A 20x retur…

If "AUM" is so crucial to power, why does the market value BlackRock at less than a third of Facebook? AUM is debt .. so its value depends on what is being done with it. To what extent that these assets can be used for "financial engineering"? They seem rather illiquid to me (and apparently the market, which feels that BlackRock's 11k employees and $4.2 trillion generate less than a third as much wealth as Facebook's…

What are we discussing? Who has more power? I'm really confused by your argument because I don't think we're arguing the same points.

Can we get back to my original response to the original post: 1. Is finance irrelevant to tech as the OP suggests. I think we can both agree that it is NOT irrelevant although we can both agree its importance (as a % of GDP and in society) has diminished.

2. Does Icahn have LEGAL legitimacy for his claims. I think we both agree that there is some legitimacy, even if we don't believe in it.

3. What is the desire to pit tech vs. finance coming from? Why can't both co-exist? Who values Facebook? Investors who make money off it.

By the way, if you think YC is going to beat Berkshire Hathaway in terms of net IRR during a comparable time-frame, you're either trolling or have a limited history of venture and angel investing. Furthermore, it's worth noting that Berkshire is doing this at a much larger base, which makes Buffet's IRR that much more impressive.

Re: When Carl Icahn Ran a Company: The Story of TWA

#96

Post by dpcheng2003 »

argumentum wrote: post #83
dpcheng2003 wrote: post #79

Earlier quoted context omitted.

New power/wealth generation is and will be in finance for the foreseeable future. I can go into great detail on this but for TL;DR purposes, I will generalize: finance > tech in making aggregate money because finance only cares about making money and tech cares about a lot of other things, which in turn generates money. I moved into tech because I liked it, not to make money. If I were still in investment banking, I'…

Power and money aren't the same thing. Power is the ability to control your environment .. i'd say that's exactly the "lot of other things" that tech cares about. Power derives from generating wealth , which is making people's lives better. Of course, people have always moved money (and information) around (and always will). Just as we've always moved goods around. That wasn't my point. When "Brittania rules the wave…

Agree to disagree my friend. I wish you well.

Re: When Carl Icahn Ran a Company: The Story of TWA

#97

Post by refurb »

protomyth wrote: post #88
refurb wrote: post #86

Earlier quoted context omitted.

I don't know the details, but maybe it kept the company from filling bankruptcy by a few months? They didn't have the cash to pay the loan, so they offered the tickets.

Selling off the most profitable route, tickets, short ordering replacement aircraft - there is not one thing he did that benefited anyone but himself. Nevermind long term company value.

That doesn't make any sense. Icahn is a shareholder himself and he mainly makes his money through share appreciation. If the share price goes up, all shareholders benefit.

I don't know enough about the TWA business dealings, but sometimes a company is more valuable broken up.

Re: When Carl Icahn Ran a Company: The Story of TWA

#98

Post by protomyth »

refurb wrote: post #97
protomyth wrote: post #88

Earlier quoted context omitted.

Selling off the most profitable route, tickets, short ordering replacement aircraft - there is not one thing he did that benefited anyone but himself. Nevermind long term company value.

That doesn't make any sense. Icahn is a shareholder himself and he mainly makes his money through share appreciation. If the share price goes up, all shareholders benefit. I don't know enough about the TWA business dealings, but sometimes a company is more valuable broken up.

Did you read the article you linked to with the stock buy-back, ticket sales, and then tanking it in Chap 11? That didn't benefit the other shareholders.

Re: When Carl Icahn Ran a Company: The Story of TWA

#99

Post by nostrademons »

dpcheng2003 wrote: post #79
argumentum wrote: post #75

Earlier quoted context omitted.

> First, Wall Street's role in capital markets towers over Silicon Valley. True, but what's the delta ? Where are the sources of new power (and subsequently wealth) being generated? Why, for that matter, are you a former investment banker and now a tech-cofounder and coder? As I'm sure you know, you're not the only one who's made that (smart) move. What moving around money was to the 19XXs, moving around information…

New power/wealth generation is and will be in finance for the foreseeable future. I can go into great detail on this but for TL;DR purposes, I will generalize: finance > tech in making aggregate money because finance only cares about making money and tech cares about a lot of other things, which in turn generates money. I moved into tech because I liked it, not to make money. If I were still in investment banking, I'…

Andreessen has very publicly said that he wants to replace money with tech. His Bitcoin bets are public statement that he believes that this new technology will disrupt an industry: that industry is finance. The majority of the financial industry probably doesn't think the threat is credible ("First they ignore you..."), but Icahn is a bit more forward-thinking than most, and he probably realizes that Andreessen is going straight after his power base.

Re: When Carl Icahn Ran a Company: The Story of TWA

#100

Post by gcb0 »

The article left me with lots ofdoubt... Take this sequence of events:

Bought 20% of company.

made it private.

Sold London route.

So, how can someone with 20% make a company private? And how can someone having his shares bought back after company went private still command it to sell anything?

Was he ceo all along?

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