What Are Carl Icahn's Plans for Hertz?

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Aug. 21 (Bloomberg) -- Suraj Srinivasan, associate professor at Harvard Business School, discusses Carl Icahn taking an 8.5 percent stake in Hertz Global Holdings. He speaks with Trish Regan on "It The Loop." (Source: Bloomberg)

The associate professor at harvard business school.

What can carl get done here?

The most important thing that he gets done is to make sure that the board does not drop its focus on the problems.

Hertz has a bunch of things going on.

With the accounting staff, with the recall, carl brings pressure on the board that keeps its eye on the ball.

The expectation is he is trying to get some board seats.

How easy or difficult will it be for him to win those?

It is not absolutely necessary.

The company already announced that the lead director -- that they will have a newly director take charge.

-- new lead director take charge.

The company is probably well advised to talk to him and to be involved.

These are not simple challenges that the company is facing.

There is a credibility issue.

Is replacing the ceo the best way to go?

I'm not sure.

But it is certainly worthwhile talking to carl.

There are two schools of thought.

Some management immediately run to put in and do everything they can to fend that activist investor off and insulate themselves from anything he or she might do.

You are advising that the management at hertz talk to carl.

Why do you think that is right in this case?

In most cases, i think.

Poison pills do not achieve much.

What is carl going to do?

Let's say he gets 15%. you still have the other 85% of shareholders that you have to get to go along.

He can't really do much unless their message that they are advocating has meaning.

My view is that it does not help to hunker down and start fighting.

It is much better to start talking and understand his view.

I would be on the phone trying to understand whether they agreed.

Carl has not said anything publicly on the specifics of what he wants.

If i were in the leadership, i would be talking.

It is interesting.

We are starting to see a reversal.

In the old days, they used to go to the poison pill.

To your point, it does not necessarily do much.

In recent years, a lot of ceos have taken carl's phone call and worked with him to try to improve the company.

For example, netflix with reed hastings.

Carl was in that stock for quite a while and the stock rose to all kinds of new highs while he was there.

You could make the argument that he really assisted and helped the company along or it was really good timing.

Pain celestial -- hane celestial as well.

They realized the poison pill was futile and they worked closely with carl icahn to improve the company overall.

You are seeing a trend in a new direction overall.

What is your research indicating?

Do you think activists really serve the market for the better?


There are activists of all kinds.

They do want to hope the market and help the company.

You see things like this spinoff that hertz has announced.

They have two activists before.

The spinoff and the buyback of shares to help companies, especially not for sale companies.

It adds value to companies more often than not.

Activists shun the spotlight on something like this.

They can help the market and keep the boards on their toes in terms of monitoring.

Definitely keeping them on their toes.

Hertz is in for a wild ride.

Think you for joining us.

An initial jobless claims up for the week coming in at 298,000, down 14,000. below the 300,000 mark.

The survey had been forced

This text has been automatically generated. It may not be 100% accurate.


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