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Carl Icahn: six decades of raids and the 2023 short attack

For 40 years, Carl Icahn was the one who showed up at other companies and demanded change. Then, in May 2023, a short seller turned the spotlight on his own company, and its units lost about half their value in three months.

Story · 7-minute read · Updated 2026-10-21

Who they were

Carl Icahn was born in New York City on 16 February 1936 and grew up in Queens. He studied philosophy at Princeton, graduating in 1957, and started medical school before dropping out.

He went to Wall Street in the early 1960s as a stockbroker. By his own account, he lost his early savings in the 1962 market drop. He moved on to trading options, a niche then.

In 1968 he bought a seat on the New York Stock Exchange and set up his own firm, Icahn & Co.

What happened

1970s–1980s: the raider years. Icahn became known for buying big stakes in companies he thought were badly run. Then he pushed for change: new bosses, asset sales, or a sale of the whole company. Critics called this "corporate raiding." He called it holding managers to account.

1985. He took control of the airline TWA after a bitter fight. It became one of his most criticised deals. He took the airline private in 1988 and left it carrying heavy debt. TWA filed for bankruptcy in 1992, the first of several. Icahn has defended his record there.

1990s–2010s. He ran his investments through Icahn Enterprises (IEP), a public company whose units trade on the Nasdaq. He took stakes in companies across oil, food, tech and more, often pushing for changes on the board.

January 2013: the Herbalife feud. Bill Ackman had bet $1 billion that the nutrition company Herbalife would fall. Icahn bought a big stake on the other side. The two argued live on CNBC. Herbalife's shares rose over the next years. Ackman closed his short in 2018. Icahn sold out in 2021.

2 May 2023: the short report. Hindenburg Research, a firm that bets against companies it thinks are flawed, published a report on IEP. It said IEP's assets were overvalued and its large payouts to unit holders were hard to sustain. It also pointed to personal loans Icahn had taken out using IEP units as collateral. Icahn and IEP denied the allegations.

August 2023. IEP halved its payout. By then its market value had roughly halved since the report.

19 August 2024. The SEC settled charges that Icahn and IEP failed to disclose his pledges of IEP units as collateral for personal margin loans. Icahn agreed to pay $500,000, and IEP $1.5 million. They settled without admitting or denying the findings.

The moment everyone remembers

Many people remember the 2013 CNBC shouting match with Ackman. Two billionaires argued live on air about the same stock, one betting up and one betting down.

But the more useful moment for a trader is 2023. The SEC found that Icahn had pledged a large share of IEP's units, at times over half, as collateral for personal loans. That's a form of borrowing against your own position.

When the units fell, those loans became a pressure point. Icahn later restructured the loans. The settlement covered disclosure, not trading losses. Still, the episode is a clear picture of how borrowed money ties your safety to a price you don't control.

What it teaches

1. Borrowing against a position links your safety to its price

A Margin call happens when a loan is backed by something that falls in value. The lender asks for more cash, or sells.

You don't need to be a billionaire for this to matter. If you trade on margin, know the price at which your broker steps in. See leverage and margin explained and the margin calculator.

2. Concentration cuts both ways

Icahn's wealth was tied heavily to one company's units. When they fell, the effect was large.

For a trader, the small version is putting too much into one idea. Keep each trade a small, fixed slice of your account. See risk management for beginners.

3. Write down the other side of your trade

The Herbalife fight showed two experienced investors looking at the same company and reaching opposite views. Someone is always on the other side of your trade.

Before you enter, write one line on why the other side might be right. Then put your exit where they would be. A pre-trade checklist makes that a habit.

What it doesn't mean

It doesn't mean Icahn's career was a failure. He was one of the best-known investors of his era, and his influence on how companies are run is widely recognised.

It doesn't mean short sellers are always right. Hindenburg's claims were disputed, and the SEC case was about disclosure, not the report's valuation claims.

And it doesn't mean his methods suit a beginner. Taking control of companies needs huge capital, lawyers and years of patience. The lesson is narrower: borrowed money and concentration make any setback bigger.

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