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Carl Icahn has established himself as a titan in the investment world since the late 1970s, renowned for his acumen in corporate activism. Despite recent setbacks, such as the dip in Icahn Enterprises (NASDAQ:IEP) due to Hindenburg Research’s short report, the 88-year-old investor is now setting his sights on reshaping the future of several prominent companies, including three prime targets.
The Electric Power Play: American Electric Power (AEP)
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Carl Icahn and his associates have quietly begun acquiring a stake in American Electric Power (NASDAQ:AEP). Despite not having disclosed the position via a13D filing with the SEC, Icahn has orchestrated a significant board presence by recruiting two Icahn-linked directors onto AEP’s board. This move suggests a more collaborative and strategic approach, potentially heralding promising developments for AEP shares, bolstered by a 4.35% forward dividend yield against a backdrop of Icahn’s involvement in enhancing cost-efficiency and potential disinvestments.
Illumina (ILMN): A Genetic Evolution in the Making
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Illumina (NASDAQ:ILMN) caught Icahn’s eye in early 2023 after a sharp devaluation stemming from its acquisition of Grail. Icahn has since secured a board seat and propelled the induction of a new CEO, all while litigating the incumbent board and demanding the ousting of two legacy directors. Despite the boardroom upheaval, the transformative potential of a Grail divestiture and uncertainty surrounding Illumina’s guidance present a dichotomous climate for investor deliberation, hanging on the cusp of potential gain versus risk.
JetBlue Airways Faces Investor Pressure After Failed Merger
It’s a turbulent time for JetBlue Airways (NASDAQ: JBLU) following the recent setback of its plans to merge with Spirit Airlines (NYSE: SAVE), which was blocked by a federal judge over antitrust concerns. The low-cost carrier then became the target of renowned activist investor Carl Icahn.
Carl Icahn’s Entry
On Feb. 12, Icahn disclosed ownership of nearly 10% of JetBlue Airways. Shortly after, JetBlue announced the addition of two Icahn nominees to its board. This move initially caused a surge in JBLU stock, but it has since retracted. The market seems wary, perhaps recalling Icahn’s tumultuous history with airline stocks, most notably TWA.
It may seem premature to compare Icahn’s investment in JetBlue with his controversial involvement in TWA, but it underscores the challenges of activist investing in the airline industry. A profitable exit strategy for Icahn might also prove elusive, especially after the failed merger with Spirit Airlines. Additionally, if JetBlue were to entertain offers for acquisition by a strategic buyer, they could face similar hurdles.
Tom Niel, a contributor to InvestorPlace.com, discloses that he does not hold any positions in the securities mentioned. The opinions expressed in this article are his own and are subject to the InvestorPlace.com Publishing Guidelines.
