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activist investing

Carl Icahn, left, and William Ackman.STAFF/Reuters

What does it look like when two very wealthy men with bruised egos take a long-running feud public?

Well, first Carl Icahn called Bill Ackman a crybaby. Then Bill Ackman called Carl Icahn a dishonest bully. Then Carl Icahn called Bill Ackman a major loser and the most arrogant guy he had ever met.

And there's more. That's merely a sampling of the insults exchanged in one of the more memorable fights in the annals of U.S. finance, all of it broadcast live on cable television.

Mr. Ackman, 46, heads Pershing Square Capital Management LP, the activist hedge-fund firm behind the shakeup at Canadian Pacific Railway Ltd. Mr. Icahn, 76, is a legendary investor and corporate raider who still strikes fear into boardrooms. The two men have a beef going back to 2003 (more on that in a moment).

More recently, they have taken public and opposite positions on the virtues of a company called Herbalife. Mr. Ackman says Herbalife is little more than a pyramid scheme and is betting that the company – or at least its share price – will eventually collapse. Mr. Icahn and a few other high-profile money managers disagree.

Their bad blood flared into public on Thursday when Mr. Icahn said on Bloomberg Television that his dislike of Mr. Ackman was "no secret." Mr. Ackman responded with a press release saying Mr. Icahn had actually once asked to be Mr. Ackman's friend. Mr. Icahn fired back with a statement Friday morning saying, among other things, that he never did such a thing.

The root of the enmity between the two men goes back to 2003 and involves a mere $4.5-million, a trifling sum for Mr. Icahn (estimated net worth: $14.8-billion) and Mr. Ackman (estimated net worth: approaching $1-billion).

The dispute, at essence, appears to be about gratitude and getting outsmarted. Mr. Icahn says he saved a younger Mr. Ackman's hide by buying one of his holdings when Mr. Ackman's business was in a precarious state.

The two men signed a contract agreeing to split future profits above a certain level if Mr. Icahn turned around and sold the shares, but Mr. Icahn claims there was a verbal agreement that Mr. Ackman wouldn't get any money in future. Mr. Icahn realized profits the following year in a merger and Mr. Ackman called to collect. Mr. Icahn refused and their battle moved to the courts – where Mr. Ackman finally prevailed in 2011.

The stage was set. At lunchtime on Friday, CNBC managed to get the two men to call into its news show. Mr. Icahn landed the first – low – blow.

Mr. Ackman is "like the crybaby in the schoolyard," said Mr. Icahn. He then recalled his school days in Queens, saying that Mr. Ackman was "like one of those little Jewish boys, crying that the world was taking advantage of him." (Both Mr. Icahn and Mr. Ackman are Jewish.)

Mr. Icahn went on to say that Mr. Ackman is the "quintessential example of, on Wall Street, if you want a friend, get a dog." He also jeered Mr. Ackman's tactic of publicly denouncing stocks – though Mr. Icahn has done the same – and engaged in the investing world's version of trash talk (my returns are bigger than yours). He used profanity twice, prompting the CNBC anchor to remind him he was on live television.

Mr. Ackman hit back, saying Mr. Icahn didn't have a "good reputation." He is "not an honest guy," Mr. Ackman said. "He is a guy who takes advantage of little people."

The two men agreed that they had had dinner at an Italian restaurant in an attempt at détente, but that was about it for common ground.

After nearly half an hour of back and forth, the very public slugfest had spawned its own Twitter hashtag (#BillionaireShowdown) and transfixed audiences from the floor of the New York Stock Exchange to the office of Fortune magazine.

"Whatever happened to the dignity of wealth!??" tweeted Jim Cramer, a well-known CNBC host.