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Carl Icahn burst onto the EDA scene back in 2011 with a hostile bid for Mentor Graphics by acquiring some 14% of MENT shares, got three board members elected, threatened to sell the company into pieces and then sat back watching his $8 shares turn into $25 just 4 years later. Today we learned that the last of 3 Icahn activist board members has quit his position.
An example of the dark side of capitalism. He also backed Herbalife, which essentially conned thousands of people to work at a loss to make a few rich. Less than one percent even made enough to cover expenses.
I looked up his deals and this one doesn't show yet, but he made 1.9B playing with Mentor in 2011. He and his investors have made tremendous money, 30% plus years several times, but our philosophies don't match at all. I like win/win/win/win for the company/investors/customers/society. I'll let you know when I find out.
I'm delighted to hear that Carl Icahn lost money in 2014, now if he could only retire and learn to play nicely with others then the world would be a better place.
I don't know enough of the financial details to have a real opinion, but it is possible that there is a connection between the threat of a hostile takeover and Mentor's increasingly good numbers and its improved stock price as the best way to fend it off. In which case it is a win for everyone. Mentor stockholders (including most employees), Carl and his crew, customers (probably. of course the customers do best when the company loses money, they are getting more than they pay for) and so on. Who lost out on the entire arc of him coming in and then going out?
Paul, I don't know hardly anything about Mentor, for I just study a few stocks and industries very, very closely, but sometimes some managements get lazy and the sharks put a fire under everyone to create value. Sometimes they just debt up and do short term measures that later cripple the company and other times they make changes for the better in which everyone can benefit. Unfortunately, many times motivation has to come from competition or outside threats. Just look at government when there is little if any threat and almost lifetime job security, they are almost always delivering less for more. If only our government had the ethos of the tech sector of constantly delivering higher performance at lower cost at an ever accelerating rate. The more government involvement in an industry, generally the more inefficient and wasteful it gets. Just look at medical where we pay three times or more what other industrialized nations pay and rank 35th in quality. Government tightly regulates medical in this country and is the largest purchaser of medical. Mix political favors with business and you end up most times with corruption which in the long run everyone looses.
Silicon Valley has created not only great technologies, but creative and innovative business models from different ways of creating and financing them to unusual life cycles. Silicon Valley is about creativity in everything, business, finance, education, even social structures and is recognized for this as totally unique in the world by people and publications such as the Economist and Barron's.
Since 2009 their stock has been on an upward climb, except a correction in 2011 during the Icahn attack.
Icahn used name-calling, insults and threats to bully his way with another public corporation. He threatened the careers of nearly every Mentor employee.
They say that one measure of a person's impact in life is how many people attend his funeral. I predict that Icahn's funeral will be very lightly attended because of how badly he has been treating other people over the years by eliminating so many jobs and scaring employees.
I spoke to Wally Rhines about this on multiple occasions and he said that Carl Icahn was a hands on type of investor (lots of phone calls). Looking back I see this as a very positive experience for Mentor operations wise. The company is much more profitable as a result for sure.
If you think that is bad, just look a Herbalife, where 99% of the distributors don't even cover expenses and this is pushed as an opportunity.
Icahn stood behind this and called Ackman a cry baby on national CNBC for exposing this Multi Level Marketing as a fraud in most cases and especially Herbalife.
