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When Carl Icahn Ran a Company: The Story of TWA

blog.pmarca.com

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

#101

Post by asharpe »

x0x0 wrote: post #25
boomzilla wrote: post #18

Earlier quoted context omitted.

I think Marc Andreessen position is weak in this fight. I have absolutely no empathy for Carl Icahn, but on this issue, he's got a good point. It seems Marc Andreessen had a conflict of interest and instead of showing that wasn't the case, Andreessen decided to attack Icahn for stuff that aren't related to this issue, even if they were definitely questionable.

from marc's blog: * Throughout the eBay board’s process of divesting Skype, I fully disclosed my potential interest and recused myself from all deliberations on the transaction, including all discussions, negotiations, and decisions. I was uninvolved in eBay’s decision to spin off Skype and in eBay’s decision to choose to partner with the Silver Lake syndicate. * eBay’s retained ownership in the Skype spinoff was 30%…

That's the crux of it: Andreessen did the right thing. The wider question is too much of the tech landscape running through one man? All power to him: all companies want his magic, but at some stage, the web of connections will cause these issues.

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

#103

Post by nknighthb »

factman wrote: post #94
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.

Wrong side. He didn't claim to be uninvolved with a16z's decision, but with ebay's. He resolved the conflict by walling himself off from one side of it, not by absenting himself from the process entirely.

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

#104

Post by quanticle »

3327 wrote: post #57
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…

Carl Icahn is scum. He does serve a purpose, and scum cleans out scum every once in a while. But I believe he is a virus and a destructive force dismantling companies for personal gain. Although he is scum, if there were virus's like him, large companies would live on forever and have nothing to fear. Interesting mechanics at work.

I upvoted you, but I'm not sure I agree. If you look at people who've really disrupted industries, they don't tend to be like Carl Icahn. Increasingly, as I read up about what happened during the M&A boom of the '80s, it does seem to me that finance played an essentially destructive role during that decade and the three that have followed. I don't see very many advances that would have been impossible without the financial industry. Instead, I see an industry which has become focused on short-term profits in exchange for long-term bailouts. Carl Icahn epitomizes this trend. That's why so many people hate him.

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

#105

Post by PakG1 »

dpcheng2003 wrote: post #54
argumentum wrote: post #30

In my view, after his humiliation by Apple's board, Carl Icahn feels his power (and by proxy the power of wall street) slowly and surely being stripped away by tech. This is at the root of his obsession with pmarca, who famously claimed that "software is eating the world." The world that's being eaten is the world of Icahn and wall street financiers like him. The tech industry has its own source of finance (namely an…

I can't presume to understand Carl Icahn (as you admitted as well) but IMHO, this is untrue and can lead fellow HNers into an echo chamber. First, Wall Street's role in capital markets towers over Silicon Valley. Venture Capital Assets Under Management is approximately $200 billion. Blackrock, the world's largest fund, has $4.3 trillion AUM. Second, while I believe pmarca acted entirely in good faith and is legally i…

I can't help but think that Icahn is jealous of Loeb's run with Yahoo and wants a similar modern day feather in his cap. Looking at the way he publicly attacks and debates with peers like Ackerman in the Herbalife situation, I wouldn't be surprised. This is purely only speculation, of course.

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

#106

Post by rohamg »

nknighthb wrote: post #103
factman wrote: post #94

Earlier quoted context omitted.

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.

Wrong side. He didn't claim to be uninvolved with a16z's decision, but with ebay's. He resolved the conflict by walling himself off from one side of it, not by absenting himself from the process entirely.

couldn't you then make the argument that ebay missed out on the guidance of one of its smartest board members? (just playing devil's advocate here)

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

#107

Post by argumentum »

dpcheng2003 wrote: post #95
argumentum wrote: post #85

Earlier quoted context omitted.

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 legit…

I was responding to your response to someone else, maybe that's the source of confusion.

1 & 2, pretty much agree (as you suggested).

3. It isn't my aim to pit (or not to pit) these industries against each other. These are merely my observations and opinions about the direction that things are headed.

My prediction about YC/BH is entirely consistent with everything else I've written in this thread. I absolutely stand behind this prediction (with the force of all my (acknowledged) insignificance).

Why would I make such a bold claim?

1. Berkshire Hathaway / Warren Buffet are symbolic of and exemplify all that was right with finance in the 19XXs and why "moving money" was so important for wealth generation in that century. I hold them in extremely high regard (as people should, in my opinion).

2. Similarly, Y-Combinator exemplifies the best of tech startup investing so far this century.

3. While (clearly) very different in many ways, both organizations are easily mistaken to be mere investors when they add a lot more value than just money. It would be just as much a mistake to view YC as a venture or angel investor as it would be to see BH as a "private equity firm".

4. This ~century is going to be fundamentally different than the last. What "value investing" was in the 19XXs is what "black swan farming"* is going to be to the 20XXs. Just as BH defined value investing, YC has defined, and will continue to define black swan farming.

5. I could go on, but I have to get to bed.

* http://www.paulgraham.com/swan.html

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

#108

Post by [deleted] »

dpcheng2003 wrote: post #95
argumentum wrote: post #85

Earlier quoted context omitted.

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 legit…

[deleted]

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

#109

Post by nknighthb »

rohamg wrote: post #106
nknighthb wrote: post #103

Earlier quoted context omitted.

Wrong side. He didn't claim to be uninvolved with a16z's decision, but with ebay's. He resolved the conflict by walling himself off from one side of it, not by absenting himself from the process entirely.

couldn't you then make the argument that ebay missed out on the guidance of one of its smartest board members? (just playing devil's advocate here)

Category error. That's no different than being out of contact on vacation. Actually, it's better, since they were only missing his guidance on this specific subject, not anything else that came up during that time.

The shareholders could simply kick him out if they felt he wasn't doing his job. Instead they re-elected him with near-unanimity.

The alleged behavior in question is not that he didn't do his job, but that he committed various torts and federal crimes.

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

#110

Post by argumentum »

debt wrote: post #51
argumentum wrote: post #30

In my view, after his humiliation by Apple's board, Carl Icahn feels his power (and by proxy the power of wall street) slowly and surely being stripped away by tech. This is at the root of his obsession with pmarca, who famously claimed that "software is eating the world." The world that's being eaten is the world of Icahn and wall street financiers like him. The tech industry has its own source of finance (namely an…

The power of the street powers tech. All of the largest tech IPOs in recent memory were organized by investment firms such as Goldman Sachs and Morgan Stanley. Basically, tech in it's current iteration wouldn't exist without the street and well-structured IPOs. Not saying I like it, just saying it's reality. Also, Carl Icahn introduces the idea corporate democracy which is a good thing considering how much influence…

> Basically, tech in it's current iteration wouldn't exist without the street and well-structured IPOs.

Are you suggesting that Facebook/Google had no value prior to their IPOs? Their public market cap is merely a reflection of the value they already provide to society.

Constitutional democracy is the least worst way to preserve individual liberty. It's not a good way to run a private corporation.

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