Wall $treet Folly

Carl Icahn is adding a new weapon to his arsenal -- a blog

There'll soon be a new blog in town, penned by none other than famed activist investor Carl Icahn. He'll  focus on what he perceives to be management problems at public companies, including ones that he's not currently involved in. There's not much there right now -- just a front page that says "Blog Coming Soon" with a picture of the man.  We look forward to its launch with anxious anticipation. Welcome to the neighborhood, Carl!       

Winnings from Bill Ackman grudge match against the bond insurers will go to charity

Bring on the ring girls!  In what's now become a hugely public grudge fight, Pershing Square's activist hedge fund manager Bill Ackman has upped the ante against the bond insurers, which he's been shorting since 2002.  Today at the Value Investing Congress he made the challenge that bond insurers MBIA and Ambac Financial would implode as soon as next year and if they do, he'll donate the hundreds of millions in fees that he knows he'll reap to charity.

Ackman said he personally stands to gain about $500 million if MBIA's holding company failed and that amount would be donated to charity. The fund itself stands to make ``multiple billions of dollars'' if the holding companies of MBIA and Ambac were to fail, he said.

``The hedge fund business is profitable. I've made more than I need,'' Ackman said. ``I also think it's the right thing to do.''

Activist hedge funds expected to get busy; Hedge funds drop most in 15 months; 4 Equity traders exit CQS; Barclays launching Islamic funds

Shotgun wedding or not, Ameritrade and E*Trade said to be talking merger

The Wall Street Journal reported that Ameritrade and E*Trade are in merger talks. You may recall that SAC Capital and Jana Partners urged the two companies to get busy and merge back in May.  Sounds like they've been talking all along:

A spokeswoman for E*Trade said the firm's management team has consistently stated it believes there is "tremendous value in consolidation that aligns business strategy and operational synergies and will do what is in the best interest of its customers." A TD Ameritrade spokeswoman said, "We have talked and continue to talk to peers in the industry."

E*Trade and TD Ameritrade have been in serious discussions for weeks but aren't yet close to a deal, according to people familiar with the matter. They have discussed an alliance several times in previous years but have never managed to make it to the altar. This time, however, they may feel more pressure to reach a deal. Two hedge funds with big stakes in TD Ameritrade have publicly urged the two companies to talk.

Pershing Square's Bill Ackman picks his next target: Target

Forcing Ameritrade to the altar: How much stock do SAC and Jana really own?

The Globe and Mail came out swinging this morning against SAC Capital's and Jana Partners'  bully tactics, where they're trying to force discount broker Ameritrade into a merger with either E*Trade or Charles Schwab (the latter having already claiming no interest).  In a scathing article, they wonder why we haven't seen a 13 D already.  They conclude that we won't, because the two firms own an 8.4% "economic interest" mostly through derivatives.  The paper also suggests that with E*Trade's activity in the subprime loan market that such a merger may be ill-timed.  They note that according to a Citigroup report that in the last quarter, the company reported a 66% increase in bad real estate loans totaling $111 million.

No one has ever accused SAC Capital, Ameritrade's new antagonist, of thinking long-term or, for that matter, being able to spell it. Dollar-store pantyhose last longer than a typical SAC investment. Last year, in an interview with The Wall Street Journal, founder Steve Cohen admitted that competition from other hedge funds made it harder to execute rapid-trading strategies, forcing the firm to hold stocks for longer - six months, sometimes even a whole year. Warren Buffett, they're not.

Round 1 went to the hedgies, if only for the way the press overstated their power and their investment. One newspaper reported that the funds had "quickly acquired 8.4 per cent of the shares" in Ameritrade. Uh, not quite. If they really owned that much, they'd have filed a 13D, a mandatory disclosure for activist shareholders who own 5 per cent or more of a U.S. stock. They haven't, because they don't.

Forget Anheuser Busch -- one analyst thinks Ackman's going after Ed Lampert (again) and Sears; Enron: Natwest Three having trouble scrounging up witnesses among former colleagues; Shorts getting more squeezed as negative rebates drive up borrow costs

                 

Ackman may target Sears NatWest Three snubbed by 35 former colleagues Short Trades Get More Costly As Hedge-fund Biz And LBOs Boom

SAC Capital and Jana Partners tag teaming to force Ameritrade to marry

Tagteaming activists:  Steve Cohen of SAC Capital and Barry Rosenstein of Jana Capital, who together have an "economic interest" in around 50 million shares of discount broker TD Ameritrade (8.4%), are looking to force a shotgun wedding of that firm with E*Trade or Charles Schwab.  They're seeking federal approval to buy $600 million more shares.  Charles Schwab has already said that they're not interested in going to the altar with AMTD.  From a TD Ameritrade filed on June 5:

Bill Ackman set to shake up big brand name $30-40 billion company with a new $2 billion single purpose activist hedge fund

According to the New York Post, activist investor Bill Ackman of Pershing Square is set to rattle his saber at a single yet undisclosed $30 to $40 billion brand name American company.  He's raised $2 billion in a new single purpose fund that closed last Friday.  One potential investor mentioned Starwood, Marriott, Anheuser-Busch  and Kraft as potential targets.