One of the greatest activist investors on Wall Street, Carl Icahn, has recently disclosed his equity portfolio for the third quarter of 2014. As the filing with the Securities and Exchange Commission showed, Mr. Icahn’s Icahn Capital holds an equity portfolio worth $33.63 billion, up from $32.53 billion a year ago. During the third quarter, the investor added two new stocks to its equity portfolio: Hertz Global Holdings, Inc. (NYSE:HTZ) and Seventy Seven Energy Inc (NYSE:SSE), and raised its exposure to three other companies. The largest position is still represented by Icahn Enterprises LP (NASDAQ:IEP)‘s own shares, with the firm adding around 1.37 million shares to 107.21 million shares, which represent over 33% of the equity portfolio. In this article, we are going to discuss Icahn’s positions in eBay Inc (NASDAQ:EBAY), Hertz Global Holdings, and Gannett Co., Inc. (NYSE:GCI), which are the largest stakes in terms of value on which the investor was bullish during the third quarter, excluding the stake in Icahn Enterprises LP (NASDAQ:IEP).
Bullish on eBay Amid PayPal Spin-off
Mr. Icahn has raised the stake in eBay Inc (NASDAQ:EBAY) by more than 15.02 million shares to around 45.83 million shares, which are valued at $2.60 billion. The position is the fourth-largest in the equity portfolio and represents an activist stake. The investor added the company to his equity portfolio during the first quarter of 2014, initially holding 27.80 million shares. eBay’s stock currently trades almost flat year-to-date, although it might gain more value as it approaches the spin-off of its PayPal unit. Mr. Icahn played an important role in this decision as he urged the board to initiate the spin-off almost immediately as he acquired a position in the company.
Right after the company announced the decision to separate PayPal, Mr. Icahn published a statement on his website (Shareholder’s Square Table) in which he saluted the decision and proposed that after the spin-off from eBay Inc (NASDAQ:EBAY), PayPal should acquire or merge with another company in the payment business in order to increase its presence on the market.
Aside from that, Mr. Icahn still considers that PayPal’s spin-off should’ve come sooner, since a proposal was made around four years ago, and that shareholders lost around $5 billion that they could’ve get if CEO John Donahoe would’ve spun-off PayPal earlier.
Nevertheless, PayPal going public might help eBay Inc (NASDAQ:EBAY) to gain some value, since the company might be struggling after Alibaba Group Holding Ltd (NYSE:BABA) went public and attracted the attention of investors. Moreover, the growing presence of Alibaba Group Holding Ltd (NYSE:BABA) in countries outside China, might also have a negative impact on eBay’s market share.
eBay is a popular stock among many big investors, such as Julian Robertson‘s Tiger Management, which owns 496,400 shares as of the end of September and Barry Rosenstein‘s JANA Partners with 13.06 million shares.
Icahn Changes Hertz’s Course
Hertz Global Holdings, Inc. (NYSE:HTZ) is a company that was added to Icahn’s equity portfolio during the third quarter. The investor initiated a stake amid the company struggling with accounting problems and lowered guidance impacted by a large number of car recalls that took place earlier this year. In the latest 13F filing, Mr. Icahn revealed ownership of 38.80 million shares, valued at $985.13 million.
Even though some speculations initially stated that Mr. Icahn acquired an 8.5% stake in order to pursue a sale of the company, he actually intends to improve Hertz Global Holdings, Inc. (NYSE:HTZ)’s current situation. Together with other investors, such as Fir Tree Partners’ Jeffrey Tannenbaum, Mr. Icahn tried to remove the former CEO Mark Frissora, who, at the beginning of September, announced his decision to step down for personal reasons. Recently, Barry Rosenstein, the manager of JANA Partners, which boosted its stake to 7% last month, has sent a letter to the company’s board, proposing the nomination of Scott Thompson for the CEO position.
Soon after Mr. Frissora had stepped down, Mr. Icahn agreed with the company to appoint three people on the Board, who replaced three retiring directors.
Hertz Global Holdings, Inc. (NYSE:HTZ)’s stock slid in October, and currently trades 21% down year-to-date. The company, however, trades at a discount relative to its consensus price target close to $28.00, but it has a ‘Hold’ consensus rating.
Backs Gannett’s Split Decision
In Gannett Co., Inc. (NYSE:GCI), Mr. Icahn reported a $444.08 million position, which contains around 14.97 million shares. The investor raised his stake that was initiated during the second quarter by adding more than 12.23 million shares during the July-September period. With boosting his stake, Mr. Icahn became one of the largest shareholders of the company and with an activist 6.6% stake, the investor can have a significant impact on the company’s returns. The investor stated in a filing with the SEC that Gannett can achieve more value if it separates into two companies. However, his plans almost coincided with Gannett Co., Inc. (NYSE:GCI)’s, which announced a couple of days earlier that it plans to spin-off its Publishing business through a tax-free distribution of shares to its existing shareholders.
John W. Rogers‘ Ariel Investments is another shareholder of Gannett Co., Inc. (NYSE:GCI), holding around 6.07 million shares as of the end of the third quarter.
Disclosure: none
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