The Dow Jones Industrial Average may have tumbled 205.67 points to close at 11,378.02 on Thursday, and the regional banking sector may continue to take hits on fears of mortgage-related losses, but billionaire activist Carl Icahn had reason to celebrate.
Continue reading below
Icahn dropped another couple hundred million in his piggy bank Thursday as ImClone Systems Inc., of which he is chairman and the second-largest shareholder with a 13.5% stake, skyrocketed 37.66% to close at $63.93 per share on news that Bristol-Myers Squibb Co. launched a $4.5 billion, or $60 per share, cash bid for ImClone for the remaining 83% it does not already own. Icahn first bought into ImClone in a big way in early 2004 when the stock was trading at just over $19.50 per share. Martha Stewart must be kicking herself now, as all she got for her insider information-driven sell-off of the biotech company in late 2001 just before it tanked 16% to about $46 per share was some time behind bars.
Regional bank shareholders were not as lucky as Icahn Thursday as the sector continued to suffer on fears of mortgage-related write-downs. National City Corp. slid 8.33% to close at $4.73 per share. Corsair Capital LLC was likely not a happy camper having led National City's $7 billion equity-based recapitalization in late April.
National City's Ohio neighbor KeyCorp dropped 5.97% to close at $10.55 per share following a Robert W. Baird & Co. analyst downgrade to "neutral," forecasting somewhat dismal earnings over the next several quarters on credit market challenges.
The broader market sunk Thursday due in part to a report of a 1.9% gross domestic product increase for the second calendar quarter, falling short of 2.4% expectations. - Michael Rudnick
