Anderson’s report has since blown an $US15 billion ($23 billion) hole in Icahn’s net worth. And Icahn, who has spent a lifetime waging one noisy boardroom battle after another, has mostly waved off the uncomfortable questions. His company, in a statement, has called the Hindenburg report “self-serving.”

In the crosshairs

Beyond that, Icahn doesn’t want to talk about it, at least publicly. In a 90-minute interview with Bloomberg News on May 21, he declined to address Hindenburg and its report directly. Yes, it’s a headache, he says. But Icahn insists that he has other things on his mind. Among them: his own latest target, gene-sequencing company Illumina. That’s still moving ahead, he says, with his proxy fight coming to a head Thursday at its annual shareholder meeting.

“You’re going after some very powerful people, you’re ruffling some big feathers,” Icahn says. “If you’re going to be bothered by this, you shouldn’t be in this business.”

He’s admitted to making at least one costly blunder: He lost $US9 billion in recent years by betting — incorrectly — that the financial markets would crash.

Icahn, who’s patched in his general counsel, says he screwed up by trying to time the markets. He says he learned his lesson and has turned back to shaking up the companies he invests in.

“I strayed from what I really do the best,” Icahn says. “Yeah, I could’ve been richer.”

These days, Icahn mostly holes up at his mansion on the chic private-island enclave of Indian Creek, northeast of downtown Miami. Locals call the island the Billionaire Bunker. Jared Kushner and Ivanka Trump are neighbours. So is hedge-funder Eddie Lampert. Security patrols the place via boat. Last week, a guard — one of 20 or so personnel who keep watch over the roughly 30 mansions — promptly turned a reporter away at the small bridge.

Icahn says he’s still playing tennis, still mixing martinis, still unwinding with a movie or two. At times, he sounds almost wistful, holding forth about his old exploits. At other times, he sounds like he’s looking forward to new battles ahead. Just the other evening, over a filet of Dover sole, he and son Brett, presumptive heir of Icahn Enterprises, were going on about the possibilities of AI.

“People come and ask me, ‘How do you feel?’ Maybe it sounds strange, but it doesn’t really affect me a whole lot. It’s my nature,” Icahn says.

‘Restless billionaire’

It’s a strange twilight-of-the-gods moment for all of Wall Street. Icahn’s manoeuvres at TWA, RJR Nabisco, Marvel, Texaco, Blockbuster — the list goes on — have passed from history to legend to near-myth. Once, he was branded a corporate raider. Today, he and his ilk prefer a gentler-sounding term: activist investor. Only last year, an HBO documentary, Icahn: The Restless Billionaire, celebrated the life and times of a figure who, in his prime, was the most-feared figure among corporate America’s CEOs.

People who know Icahn say the reversal has to sting.

“He’s never been humiliated like this,” says Mark Stevens, Icahn biographer and founder of consulting company MSCO.

Icahn always loved tilting at the corporate establishment. “It was like breaking their golf clubs and pouring vinegar in their martinis,” Stevens says, “and Hindenburg just did it to him.”

To Icahn’s enemies — and he’s made his share — the Hindenburg bombshell seems like long-awaited comeuppance.

“There is a karmic quality to this short report that reinforces the notion of a circle of life and death,” hedge fund billionaire Bill Ackman tweeted when the report hit. Ackman, 57, famously jousted with Icahn a decade ago over Herbalife and ended up losing a fortune. (Icahn and Ackman declined to discuss their feud or each other.)

Hindenburg declined to comment beyond its report. But it’s chalked up Icahn’s response thus far as a win. Shares in Icahn Enterprises were down 43 per cent from May 1 through Monday.

Lost decade

It’s hard to argue about Icahn’s lacklustre performance of late. This has been a lost decade for Icahn Enterprises stock. The price has fallen more than 60 per cent over the past 10 years, while the S&P 500 has gained about 153 per cent. Dividends have made up some of the difference: Icahn Enterprises has handed stockholders a total return of about 6 per cent. But the S&P has returned roughly 206 per cent.

Icahn says he’s received an “outpouring” of support from shareholders since Hindenburg’s salvo. “A lot of emails saying go get ’em, go fight ’em,” he says.

The public company owns stakes in a variety of businesses in industries ranging from energy to food to real estate, as well as Icahn’s not-so-secret weapons: the private investment funds he uses to wage his activist campaigns.

Those funds buy into companies so Icahn can agitate for change, whether that’s new management, a strategic rethink, job cuts — whatever it takes to push up the stock and make money for Carl Icahn. But they were also where he was making those short wagers that cost him billions.

Icahn, his company, and son Brett, who is also a portfolio manager at the funds, are the sole investors in the private vehicles.

Trouble is, those private funds, the source of Icahn’s power as an activist, have been doing poorly for years. A dollar invested in them a decade ago would be worth less than 50 cents now, according to Bloomberg calculations.

‘My army’

Those dwindling funds meant Icahn was losing the firepower needed to intimidate CEOs. So he doubled down, pouring in $US3.6 billion since the start of 2013.

“He once told me: ‘my money is my army and I need my army around me,‘” Stevens says.

Icahn Enterprises in February disclosed that Icahn had pledged stock worth about $US9.8 billion as collateral against margin loans. Those shares are worth $US5.6 billion today.

He’s since upped his pledged shares by 21 million. If the stock keeps falling, Icahn might have to repay the loans or risk having his shares liquidated. A margin call would put even more pressure on the stock.

‘Most of us think one or two chess moves ahead. Carl always thinks nine or 11 moves ahead.’

Mark Stevens, Icahn biographer and founder of consulting company MSCO.

In past regulatory filings, Icahn Enterprises said he had plenty of other assets he could use to repay his loans and avoid a margin call. In its May filing, that seemingly rote language was conspicuously absent.

One question is why Icahn would borrow so much against his stock to begin with. Before Hindenburg came along, Carl Icahn was worth about $US25 billion, according to the Bloomberg Billionaires Index. Today, he’s worth $US10 billion. Hindenburg has speculated the loans covered his investments into the private funds.

Icahn declined to discuss his wealth, private funds or margin loans for this story.

Hindenburg isn’t Icahn’s only problem. Icahn Enterprises disclosed on May 10 that federal prosecutors in the mighty Southern District of New York were looking into Hindenburg’s allegations. That’s the same office that went after Wall Street during the roaring 1980s, when Icahn shot to worldwide fame. The SDNY, as is its custom, declined to comment on an open inquiry.

Off guard

Stevens, the biographer, suspects the financial blow thus far is nothing next to the personal one Icahn has suffered.

“They caught him off guard, he lost money and somebody outsmarted him,” Stevens says. “These are the three worst things that can happen to Carl Icahn.”

Up Biscayne Bay from Icahn’s island mansion, in Sunny Isles Beach, things are quiet at the headquarters of Icahn Enterprises. Icahn comes in occasionally (he tried travelling in by boat, but that got to be a hassle). Mostly he works from Indian Creek. Other employees have been coming and going as usual, the building manager says. Icahn Enterprises has instructed building staff to let only cleared visitors up to its penthouse offices.

Carl Icahn owns about 84 per cent of Icahn Enterprises. That makes shorting its stock difficult and expensive. Only about 100,000 shares remain available to borrow, according to S3 Partners, a financial data company that tracks short sales.

Already, Icahn is plotting his defence. Icahn Enterprises has said it will buy back as much as $US500 million of its shares on the open market. But it could be too late to crush Hindenburg. Activist short-sellers tend to cover most of their position quickly after successful campaigns.

Stevens, the biographer, says no one should count Icahn out. “Most of us think one or two chess moves ahead,” he says. “Carl always thinks nine or 11 moves ahead.”

‘Warrior Gene’

Carl Icahn isn’t one to go quietly. He never has.

Today, the full measure of his life – from the humble roots in Queens to pinnacles of Wall Street, the battles won and sometimes lost – is being taken by new generations of capitalists, as well as capitalism’s detractors.

Icahn has said, only half-jokingly, that his mother used to say he inherited a “warrior gene.” In the HBO documentary, the camera pans from a notebook titled “People I Want to Punch in the Face” to a pillow embroidered with words of Wall Street wisdom: “Happiness is positive cash flow.”

At one point Carl Icahn, gravel-voiced and bearded, looks into the camera and says: “I don’t like to start wars, but if someone wants to start it with me, there’s something in me that likes that — cause I’m really looking forward to going at them.”

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Even now, at 87, Icahn is still Icahn. On Sunday, from Indian Creek, he says this fight isn’t over yet.

But no one can turn back time. At one point, he contemplates his age and says “I really don’t mind being old. I still love doing this.”

“It reminds me of a line in Gigi,” he adds, referring to the 1958 musical.

The fountain of youth is dull as paint,

Methuselah is my patron saint.

Bloomberg

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