Icahn’s dumping of steel stock just before Trump tariffs raises eyebrows
05 Mar 2018
Billionaire investor Carl Icahn sold nearly 1 million shares of stock in a company tied to the steel industry just ahead of President Donald Trump's decision on Thursday to impose costly tariffs on steel and aluminium imported into the US, reports today said.
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| Carl Icahn |
Icahn has fairly close ties to Trump; he was an unpaid adviser to the president before resigning last August.
President Donald Trump's tariff decision took many by surprise – particularly investors, as the Dow Jones Industrial Average closed the day's trading down more than 400 points, or 1.7 per cent, at 24,608.
But Icahn had no worries, having dumped a million shares tied to the steel industry a week before the president announced 25 per cent for foreign-made steel.
A recent regulatory filing disclosed Icahn sold $31.3 million worth of stock in crane manufacturer Manitowoc Co last month. Manitowoc could be hurt by Trump's tariffs, a threat that caused the company's shares to drop by 9 per cent to $26.93 since the president's announcement.
Icahn sold his Manitowoc stock at prices ranging from $32.47 to $34.31 from 12-22 February. Before that, he had not actively traded any Manitowoc stock since January 2015, according to regulatory filings.
Icahn's office didn't respond to media requests for comment on Saturday.
Icahn has had majority interest in several companies including Motorola, Xerox, Family Dollar, and Pep Boys, as well as the now-defunct Trans World Airlines (TWA). He bought the airline in 1985, but became a local pariah in St Louis after he pulled nearly $1 billion out of the company and doubled its debt to $2.67 billion. His involvement ended when he surrendered control in 1993. American Airlines later bought TWA, and eliminated the passenger hub at Lambert-St Louis International Airport.
Trump's tariffs decision, which leans on a little-used provision of US trade law, has now caused other countries to retaliate against American exports. The European Union, for example, is considering duties on US imports worth about $3.5 billion if the White House enacts its tariffs, Reuters reported Friday.
''We'll be imposing tariffs on steel imports and tariffs on aluminium imports,'' Trump announced at the White House on Thursday. ''You will have protection for the first time in a long while, and you're going to regrow your industries.''
Trump and Icahn's history is one of friends turned foes turned friends, says a Washington Post report. It began in the early 1980s, when Trump tried to win Icahn over with a helicopter ride. In 1988, when Trump paid $11 million to host a heavyweight title fight between Mike Tyson and Michael Spinks in Atlantic City, New Jersey, Trump took Icahn, known at the time for his series of hostile corporate takeovers, backstage to meet Tyson.
During the announcer's roll call of famous guests, Icahn was called Trump's ''good friend'', according to the New Yorker.
In the early 1990s, Icahn headed the deal that allowed Trump to keep some of his power and ownership of his Taj Mahal casino during its first bout with bankruptcy. Trump's share of the casino, about 50 per cent, was a generous one, but Icahn articulated that investors could still boot Trump out. Many involved in the deal thought Icahn had outmanoeuvred Trump, according to The Washington Post.
By 2010, Trump Entertainment Resorts was flooded with debt, and Icahn pushed to take over, saying Trump's brand had become a ''disadvantage'' that may no longer have been ''synonymous with business acumen, high quality . . . and enormous success''.
Tensions appeared to have eased by the time Trump ran for president, as he spoke fondly of Icahn, calling him one of the ''great businessmen of the world'', smart enough to tackle US negotiations with China. In return, Icahn endorsed Trump, saying the country would be ''lucky'' to have him in the Oval Office.
Though Icahn no longer advises Trump in a formal role, the two reportedly still talk. Icahn resigned from his position as a ''special adviser'' to Trump on regulatory reform in August, claiming he didn't want to step on the toes of Neomi Rao, the administrator of the Office of Information and Regulatory Affairs, and because he wanted to avoid conflicts of interest over regulations that would impact an oil refinery company he owns, CVR Energy.
