Carl Icahn returns to his activist roots with new investments

Carl Icahn’s investments in JetBlue Airways Corp. and American Electric Power Co. are clear indications that the renowned activist is moving on from his bruising tussle with a short seller last year. 

The stakes fit a classic playbook that turned Icahn into a billionaire: zero in on a company, try to acquire or gain control of it and then sell off assets or the business itself.

They also mark Icahn’s first publicly announced positions since his firm Icahn Enterprises was accused by Hindenburg Research in 2023 of being over-leveraged and over-valued. Hindenburg’s report at one point knocked more than $2 billion off Icahn’s net worth.

In the wake of that attack, Icahn halved his company’s dividends and promised to refocus on straight activism, which he described as the best investment approach. “Going forward, we intend to stick to our knitting and focus on our activist strategy while remaining appropriately hedged,” he wrote in August.

On Monday, he followed through on that pledge. 

AEP, with a market value of $40 billion, appointed two directors to its board under an agreement with the activist. The Columbus, Ohio-based utility owner’s shares climbed as much as 2.5% on Tuesday, the biggest upward move since December.

JetBlue Stake

Icahn also disclosed a nearly 10% stake in JetBlue with plans to seek at least one board seat. The stake, revealed on the same day that the carrier’s new chief executive officer, Joanna Geraghty, took over, makes him the third largest shareholder of the airline, according to data compiled by Bloomberg. It wasn’t immediately clear what changes Icahn wants or how many board seats he intends to pursue.

JetBlue is facing challenges to its growth plans after federal courts struck down a regional alliance with American Airlines Group Inc. and blocked JetBlue’s planned $3.8 billion takeover of Spirit Airlines Inc. The carrier’s shares had dropped 30% over the past 12 months before recovering almost half of that value at their peak Tuesday. They were up 13% at 10:33 a.m. in New York, giving JetBlue a market value of $2.3 billion.

“We are always open to constructive dialogue with our investors as we continue to execute our plan to enhance value for all of our shareholders and stakeholders,” JetBlue said in a statement after Icahn’s stake was disclosed.

A representative for Icahn Enterprises declined to comment.

Return to Roots

Icahn, 87, has a long history in the power and airline sectors. 

Roughly two years ago, he agitated for change at Southwest Gas Holdings Inc., which sold assets and appointed some of Icahn’s nominees to its board after a bitter battle with the activist. Icahn Enterprises still owns about 15% of Southwest Gas, Bloomberg-compiled data show. 

He is also going back to his roots in the aviation industry. Icahn was the owner of Trans World Airlines, or TWA, decades ago when it was taken private and eventually went through bankruptcy.