Marc Andreessen: Carl Icahn Killed An Entire Airline
For the last several weeks, Icahn, eBay, and Andreessen have been exchanging open letters, with Icahn insisting that Andreessen is a bad board member who cost stockholders billions of dollars. Icahn thinks that Andreessen screwed shareholders when he allowed eBay to sell Skype to an investor group that he was a part of. Icahn wants his own people on eBay's board, and he believes that stockholders would benefit if eBay sold PayPal.
Andreessen has fired the latest salvo in that battle. The story on Andreessen's blog today, portrays Icahn as a terrible board member who cost TWA at least $100 million a year for several years, and more or less killed the company.
It reportedly started when Icahn bought more than 20 percent of Trans World Airlines's stock in 1985, and then preceded to take TWA private, enriching himself with a $469 million payment. At the same time, TWA got laden with $540 million in debt. Icahn then sold the airline's London routes for $445 million in 1991. The sale was "a killer" for TWA, because the London routes were very valuable. The airline went bankrupt a year later.
In 1993, Icahn resigned as chairman, but signed a deal called the "Karabu ticket agreement," that allowed him to buy any ticket that connected through St. Louis for 55 cents on the dollar and resell them at a discount. The deal blocked him from selling tickets through travel agents, but he set up Lowestfare.com and made a killing.
The company went bankrupt again in 1995 and eventually merged with American Airlines in 2001, which later estimated that the Karabu deal had cost TWA $100 million per year.
Here's the full post:
Disclosure: Marc Andreessen is an investor in Business Insider.