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.
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