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The Morning Brief: Carl Icahn on Herbalife, Apple and the Fed

Carl Icahn has turned up the heat on his nemesis, William Ackman of Pershing Square Capital Management. Herbalife Monday announced that it will nominate three more directors identified by Icahn, whose various entities own 16.8 percent of the shares of the multi-level marketer of nutrition products. These three people will join two other Icahn representatives who now serve on the board. In addition, Icahn’s entities are permitted to increase their stake to 25 percent.

“The current Icahn representatives have brought considerable insight and experience to our board,” said Michael Johnson, chairman and chief executive officer of Herbalife, in a press release. In an interview with CNBC, Icahn said that despite the recent selloff in Herbalife’s stock, he is still sitting with a $300 million profit. “The last word has not been written yet,” he said. “Ackman and his investors will get the short end of that stick.”

In the interview, Icahn also expressed concern for the overall economy as well as the stock market. Sounding somewhat gloomy, the septuagenarian said it is not a question of if but when we get a “real selloff,” adding: “We have a lot of problems—our economy. We have high unemployment, pension funds are underfunded.” Icahn also criticized the Federal Reserve, asserting it created an artificial market. “I don’t see great earnings,” he added. “How much can (Fed chairman Janet) Yellen keep pumping money in? BB and BBB companies are borrowing money at very cheap rates.”

Shares of Netflix fell about 6.7 percent on Monday on reports that Apple is discussing a streaming TV partnership with Comcast. In his interview with CNBC, Icahn said he has sold “about half, maybe a little more” of his stake in Netflix. He said he paid an average price of $58 a share. The stock closed Monday at $378.90, so he’s still doing all right with the stock.

Two of Greenlight Capital’s high profile shorts suffered big selloffs on Monday. Shares of Keurig Green Mountain slumped more than 5 percent, while Chipotle Mexican Grill fell about 3.6 percent. Even so, for the year the stocks are up 40 percent and 10 percent, respectively.

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