Billionaire activist investor Carl Icahn appeared on CNBC on Thursday and discussed several important topics on Wall Street, including the Occidental Petroleum Corporation (NYSE: OXY) buyout of Anadarko Petroleum Corporation (NYSE: APC), the health of the general market and the potential impact of further Federal Reserve interest rate cuts.
Cloudera And Occidental
Icahn didn’t pull any punches in criticizing the Anadarko buyout.
“I think this deal is one of the worst I’ve ever seen,” Icahn said. “You take a look at OXY and you take a look at Vicki Hollub, who says that’s she’s done a great job and is interested in the long-term benefits to the company...since she came in at CEO on May 2, 2016, has dropped $23.7 billion, down 41% under her stewardship.”
The $55 billion Anadarko buyout, which officially closed on Thursday, was “hugely overpriced” and could put Occidental in financial danger should the oil market deteriorate further.
“I think its a very undervalued company, obviously, or I wouldn’t be buying it. I think one and a half times revenue for a company like that, I think it’s very attractive,” he said.
Icahn admitted Cloudera didn’t do the best job on its recent acquisition of Hortonworks, but he said he didn't seek a board seat after meeting with company management.
Trade War And The Fed
Icahn also responded to President Donald Trump’s calls for lower interest rates on Thursday, telling CNBC the solution to economic weakness isn't as simple as rate cuts.
“There is an argument for cutting rates, but you look at Europe, I mean they cut their cuts to negative, and look at the economy over there, so I don’t think that’s the final answer to the problem,” he said.
Instead, Icahn said a trade deal with China is essential to maintaining the health of the U.S. economy.
“The China problem is not just having repercussions for us, it has repercussions throughout the world,” he said.
“I think there’s certainly some interesting opportunities, but you have to worry about a full-scale recession, so you have both these things weighing on you.”
Icahn said the current environment is interesting because it's one of the few times in which he hasn’t had a strong feeling either way of whether the market is headed next.
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