Carl Icahn

Week 8–Discussion topic for the week.

Discussion Forum

Carl Icahn is now a large shareholder in Blockbuster. As everybody knows, Netflix has taken a good deal of market share from Blockbuster. Icahn says alternately that he is happy and unhappy with his investment. Do not be fooled by his public prinouncements.

Since Carl Icahn is a successful and aggressive investor, what are some of the profitable possibilities he may have in mind for Blockbuster? For example, will they compete head-to-head with Netflix? Or, will they partner with someone else to provide a bundle of services?

Please note that Blockbuster is not unaware of digital technology.

The first 10% of takeover of Netflix is successful proxy fight for Carl Icahn. His character is obviously aggressive but he is exactly the man who I’ve been imagining “Vulture” of United States. If he scowls fiercely at target company, the company actually would go private and cease to exist from his territory.

However, in this time, his character caused the worst scenario for him. The problem of bonus for a certain manager who mainly engaged internet business brought about stagnant of main internet business and bankruptcy. The internet business was actually “Crown Jewel” to defeat Netflix. This kind of trouble had been before when he broke up with TWA. There were supposed to be a lot of candidates of “White Knight” to help Blockbuster but I guess this was an inner problem between Carl and the manager and they could’nt help them from outside.

There are some imformation that the manager who engaged internet business betrayed Carl Icahn and helped Netflix to fend off him. The one thing I want to say is these interrelationship strongly affect M&A while people are usually considering stock price and company value.

In conclusion, Netflix didnt even take poison pill because Blockbuster collapesed by themselves. However, Netflix seemed to be so scared.