Carl Icahn’s Amazing Trade

WSJ and Reuters reported that Icahn sold 2.9 million shares of Motorola Mobility (MMI) at $38.79 per share. Here are the transactions’ details. Here is what WSJ says:

Icahn left more than $3.5 million on the table by selling at less than Google’s $40-a-share acquisition price. But we’re guessing Icahn has better things to do with his millions than to park it and twiddle his thumbs while Google winds through deal-related regulatory reviews.

We don’t know what Carl Icahn is doing right now but three months ago Icahn filed a 13G disclosing a $58.3 million share position in El Paso (EP). Icahn probably paid around $18 per share in early August when the stock briefly dipped below $17 and trading volume spiked to 45 million shares. On August 19th ElPaso was closed at $17.34. Ordinary investors could have easily imitated Icahn’s giant El Paso bet at $18 per share. By the end of September Icahn increased his position in El Paso to 66 million shares.

Today El Paso is trading at $24.90 per share. Icahn made close to half a billion dollars in 3 months. Investors who imitated Icahn’s bet returned almost 39%. This is an amazing trade in a market where seasoned hedge fund managers are getting killed left and right. Carl Icahn isn’t in the business of merger arbitrate. He is in the business of mergers. If he sold his MMI shares a few days early I am certain that he has something better to do with the money. We will probably find out soon, so watch out 13G filings.

It is also kind of interesting that everybody talked about John Paulson’s $500 million loss in Sino-Forest for months, yet nobody is talking about Carl Icahn’s $500 million profit. Media definitely loves covering suffering hedge fund managers.