On February 22, the CEO of Icahn Enterprises, Carl Icahn, announced a financial move that wouldn’t make any sense, if it weren’t for what his longtime friend and confidant Donald Trump was making a plan for at the time.
The billionaire investor dumped more than thirty million dollars in stock he held in Manitowoc Company, Inc., a manufacturer of “cranes and lifting solutions” — or in other words, a builder of great big things made out of steel.
Carl’s on Twitter, and the bio section of his profile is pretty concise:
Chairman of Icahn Enterprises L.P.; etc., etc. Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity.”
Icahn may be relying on a little stupidity at the Securities and Exchange Commission because that $31.3 million trade came just a week before his pal Donald announced a new 25 percent tariff on steel that would make prices for steel-made goods plunge in a possible price war with steel-producing nations around the world.
Oh, steel producers are happy — the massive tax on imported steel means that domestic product will be just as cheap as Chinese steel. But that’s not the short term effect. In the short term, what it means is that Chinese steel prices will increase to match America’s, giving companies no more incentive to buy overseas.
That’s when the price war would begin.
If that sounds like insider trading to you, that’s because it is. And if it sounds like something that an adviser should have warned Trump not to do, consider the fact that literally everyone, including Congress and most of Trump’s own Cabinet, was totally blindsided by the White House announcement to impose the tariff. People knew something was coming on steel; Trump had been discussing it at length.
But prior to the sudden announcement, it was still “in talks” and the tariff that Trump announced was actually higher than any that had been discussed.
Icahn, whose “foresight” to dump all that stock in the crane manufacturer meant he narrowly missed a six percent drop in the value of that company’s stock — and therefore made or saved millions in the seemingly psychic move.
Icahn, in fact, had worked in Trump’s White House as a special adviser, although he resigned in August after scrutiny over a similar situation revealed he had personally been in contact with a policymaker at the EPA, whose decision on an environmental rule could have either made or cost his company millions in investments.
How did Carl Icahn know to dump all that steel manufacturing stock one week before its value would plummet?
You’ll have to ask his pal Donald.
Featured image via Alex Wong/Getty Images