If the Markets Crash Then Carl Icahn Could Win Big

[Lodestar]

If financial markets crash, one of the biggest beneficiaries could be billionaire investor Carl Icahn.

An investment fund run by the 80-year-old Icahn had a net short position of 149% at the end of the first quarter. Icahn is considerably more bearish than he was at the end of 2015, when the fund’s net short position was 25%. A year ago, the fund had a net long position of 4%. It’s rare to see a fund outside a dedicated short fund with such a large bearish stance.

The 149% net short position was disclosed by the management of Icahn Enterprises (ticker: IEP ), which holds a $1.8 billion interest in the investment fund, on an earnings conference call on May 5. Icahn Enterprises is a diversified investment vehicle run by the activist investor who holds a roughly 90% stake in the company. Icahn Enterprises holds sizable equity stakes in CVR Energy ( CVI ), an oil refiner, and Federal-Mogul ( FDML ), an auto-parts company, and it bought Pep Boys, the auto-service chain, earlier this year. These stakes are held outside the Icahn-run investment fund.

Icahn’s dominant stake gives him free rein to handle the company’s investments pretty much as he pleases. Asked about the big bearish stance, Icahn Enterprises CEO Keith Cozza said on the conference call that “Carl has been very vocal in recent weeks in the media” about his negative views. ‘We’re much more concerned about the market going down 20% than we are it going up 20%. And so the significant weighting to the short side reflects that.” Icahn was not on the call.

Late last month on CNBC, Icahn warned “there will be a day of reckoning unless we get fiscal stimulus.”

cont'd
http://www.barrons.com/articles/if-the-markets-crash-then-carl-icahn-could-win-big-1462828022

[Califonz]

1. Yellen might juice the market with another round of QE

if it looks like Trump might win the election.