What would Icahn have to pay to take the company private to really hurt Ackman.......
Does anyone truly have any idea what Ackman's price per share average is? I am guessing he was smart enough to pick it up in the 70's (not the $50's as many have suggested here). If that is the case, in order to hurt Ackman, wouldn't the price per share have to at least equal his average price per share (take all of his profits away)? And if he really wanted to hurt him, wouldn't he have to get it up into the low $100's per share????
Nope. A tender offer can be made at $60 and Ackman still needs to acquire shares which he borrowed and give back to the lenders. This is why Carl said his short was so reckless on CNBC.
The stock can go much higher as he tries to buy from longs. A tender just puts in a really nice floor on the stock PPS.
1. I am 90% sure that Icahn will NOT make a real tender offer. He is old but not stupid.
2. He will talk about it, though. As part of his tactics to squeeze Ackman.
3. Regarding the question on the $ price of a buy-out to hurt Ackman, in this particular case, Ackman could potentially need to cover at a much higher price (even at $200, say) despite a tender price at $70.
Why? The investor(s) lending shares to Ackman will, for sure, tender their shares. That will force Ackman into a NAKED SHORT position. That is not legal. He MUST cover regardless of cost. $100 he has to cover. $200 he has to cover. In theory (& it has happened before), even at $1,000 he has to cover.
In a nut shell, in hindsight, Ackman is really STUPID to let his big ego to direct his trading. I feel bad for the SHORTS who follow Ackman blindly without doing any due diligence work.
As I tried to warn them before, even if you hate the company, that does not mean that you should SHORT the shares. Case in point here.