A Lesson in Difficult Personalities: Carl Icahn vs. Dell

Rob Enderle

A lot of questionable behavior seems to be coming from some of the more affluent male population these days, but the recent Chancery Court decision against Carl Icahn from last month takes the cake. If I read this correctly, Icahn is basically arguing that Dell’s board should be removed because they didn’t want to sell him the best parts of Dell and instead they prefer a deal that will sell the entire company. Can you imagine refinancing your house only to have a buyer try to get your bank to let them purchase only the master bedroom, kitchen and living room? And the buyer claims their offer is valid because they are willing to pay more per square foot for those parts? You’d likely want to have the erstwhile buyer committed because banks can’t sell your house out from under you. But even if they could, they’d be idiots to sell off the best parts instead of selling the house in its entirety.

That was pretty much what the court decided in this case, too, that Dell’s board wasn’t made up of idiots. (Michael Dell likely breathed a sigh of relief.) And the court wasn’t alone in their backing of Michael Dell; Institutional Shareholder Services Inc. (ISS), one of the most respected investor advisory companies, came out in favor of Dell’s planned buyout.

But Icahn is unyielding even when wrong (which is kind of crazy), and that means he’ll likely be a pain in Michael Dell’s side for some time. Icahn actually proves the Argumentative Theory of Reasoning. That being said, I will now explain my tips on how to deal with men like Carl Icahn.

Don’t Confront

What makes an older, affluent crazy rich guy seem, well crazy, is that they are aging and there’s no way around it. They can see smarter, more talented people moving up in the world, and they are reminded of their increasing inability to compete. They aren’t as quick. They don’t remember as much. They don’t have the energy they once had. They still want to be seen with hot young women who used to be attracted to their looks but are now just are interested in their wealth or just aren’t interested. They are desperately trying to hang on to their youth and power by hiding the fact that both are drifting away with ever greater speed—their greatest achievements are slipping through their fingers.

To compensate, they try to prove they are still the top dog in whatever pack they associate with and every confrontation is taken as a personal challenge. Their only tools to win the battle are massive resources and wealth. I have little doubt that attorneys and related service providers who feed off of them play up these inflaming conflicts to their benefit. Having said that, I won’t change my advice: Do not confront them unless you are truly willing to go all out (meaning you have equivalent resources and tons of time).

In fact, if you can be diplomatic, you may be able to convince them that they have the upper hand and can walk away with a win. Any victory you likely will have will be Pyrrhic, so look for a loss that offers the least pain possible.

Flat out Avoid Them

It may seem like these guys are money magnets, but they are truly more like drama queens—albeit expensive ones. You sure as heck don’t want to partner with them because they will be vitriolic and mercurial at best. In addition, they tend to attract mortal enemies like flies and some of these folks may try to use you as an easy path to revenge. Don’t let them drag you into their conflict. Walk away, or better yet, just stay away.


Consider Manipulation

If you consider yourself to be skilled at manipulation, these men are great targets. We are generally talking about guys with egos that write checks their bodies can no longer cash. An attractive woman in her mid to late 30s—he would be less threatened by a woman—with demonstrated skills in the art of manipulation would probably have the best chance at redirecting his energies onto someone (or something) else.

Consider reading up on manipulative strategies prior to your attack. To be successful, you must have a viable plan that contains a path more attractive than the one they are on, and given that they aren’t trusting of others, the benefits of this new deal should be clear and pervasive. I’ve seen this done only a handful of times, and often the positive outcome still seems more like luck than anything else. Another tip is that you should assure that your relationship is fairly solid--there is a good chance that tensions will drop over time as a result.

However, you don’t get to be someone like Icahn without becoming a major manipulator yourself, which leads me to my next point.

Don’t Let Him Define Your Choices

Carl Icahn seems to be trying to define Michael Dell’s choices as pay him or lose the company. However, there are actually several other choices. One is to withdraw the offer, let the stock drop, and have everyone focus their anger for said loss at Carl Icahn for killing the chance for profit. Michael Dell doesn’t have to buy the company, it was always a long shot, and there is a good chance that without the support of Dell’s bid, the stock would drop to between $8 and $10, costing Icahn hundreds of millions of dollars on paper and clearly putting him in the doghouse with the other major Dell investors.

Dell could use the money he was going to invest instead for funding startups to close future gaps in Dell’s portfolio or to create a startup that would eventually grow into what he wanted to turn Dell into, retaining both the old and the new. He could then retire from the old company to run the new one and, assuming it was successful, buy Dell at some future point. Even if Icahn were successful in his bid, Michael Dell could take the massive windfall of cash and create a new company from scratch--which often is far easier than rebuilding a company anyway. Folks like Icahn will try to make you feel boxed in, when the reality is that they have painted themselves into a corner. You just have to see through their charade to realize your other options.

Wrapping Up

I feel for Michael Dell because I know what it is like to deal with guys like Icahn and fun it isn’t. My hope is that none of you ever have to do any more than read about it and know that Michael Dell’s pain will soon be over. Still, whatever doesn’t kill you makes you stronger, right? Personally, I’m good where I’m at and don’t need to get any stronger. So here’s hoping that dealing with these guys is always someone else’s problem and not our own.



Add Comment      Leave a comment on this blog post
Jul 9, 2013 7:25 PM Danny Danny  says:
You clearly are clueless when it comes to investing and strategy. But I won't waste my breath. I spent a minute reading your useless article and came to the conclusion that you're a moron who has no business criticizing one of the, if not the greatest investor of all time. Reply

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