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How Carl Icahn Made $1.4 Billion Playing The Booms And Busts Of Las Vegas

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On Tuesday, billionaire Carl Icahn announced he had sold the unfinished Fontainebleau resort in Las Vegas for $600 million, quadrupling his money in seven years. Just up the Las Vegas strip a few weeks earlier, in June, Golden Entertainment said it had agreed to buy the Stratosphere resort for $850 million from Goldman Sachs.

These summer deals for the Fontainebleau and Stratosphere show Icahn at his best and are a reminder that while many people go to Las Vegas to gamble, Icahn has been enormously successful playing his own game, betting on the booms and busts of Las Vegas that have humbled other big players.

This Spanish Billionaire Keeps Losing His Spot As The World’s Richest Person

One of the greatest deals Icahn ever made was for the Stratosphere resort, a hotel-casino that includes the nation’s tallest freestanding observation tower. The vision of Bob Stupak and located north of the Las Vegas Strip, the Stratosphere opened in 1996 and by the winter of 1997 it was in bankruptcy court.

Icahn took control of the situation by buying big chunks of the Stratosphere’s debt for pennies on the dollar, becoming its biggest creditor. He purchased the Stratosphere out of bankruptcy court in 1998 and eventually bought out the minority shareholders, too.

But he didn’t stop there. Icahn bought 17 acres of vacant land surrounding the hotel, tracking down the owners of individual homes and properties, many of them abandoned in what was then an economically depressed part of town. Some observers thought Icahn had lost his mind. After picking up some other casino assets like Las Vegas’ Arizona Charlie’s, Icahn’s Vegas bet all-in totaled about $300 million.

Elon Musk’s Net Worth Eclipses $20 Billion For First Time

As Bob Stupak had envisioned, Las Vegas boomed and tourists found their way up the Las Vegas Strip to the Stratosphere. With the credit markets flowing, Icahn sold the Stratosphere assets for $1.3 billion to Goldman Sachs’ Whitehall Street Real Estate Fund in 2007 at the top of the market cycle. Goldman Sachs’ lending arm funded the deal with lots of debt and the land Icahn had purchased around the Stratosphere was the key to the deal that closed on the eve of the financial crisis. Icahn made $1 billion in profits. – Written by 

Billionaires

Tesla Vehicles Could Soon Become Completely Autonomous As Self-Driving Tech ‘Very Close’, Elon Musk Says

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Tesla vehicles could soon be completely autonomous as CEO Elon Musk said the electric vehicle firm is “very close” to achieving level 5 autonomous driving technology, during a virtual appearance at the World Artificial Intelligence Conference in Shanghai.

KEY FACTS

  • “I’m extremely confident that level 5 or essentially complete autonomy will happen and I think will happen very quickly,” Musk said.
  • He added that he is confident “basic functionality” for level 5 complete autonomy will be achieved this year.
  • The technology will allow vehicles to drive on roads without driver input.
  • Tesla, the world’s highest-valued carmaker after overtaking Toyota last week, already operates an Autopilot system that uses external cameras, radars and sensors, but it is driver assisted and does not make the vehicle autonomous.

KEY BACKGROUND

Tech firms, including Uber and Alphabet-owned Waymo, have pumped billions into developing self-driving cars, a futuristic idea that many had predicted would be ready by this year. But limitations around AI have stalled development of the technology. Last month, Waymo and Volvo announced they were teaming up to develop driverless cars for ride-hailing use.

TANGENT

In February, the National Transportation Safety Board found Tesla’s autopilot driver assistance was likely to blame for a fatal 2018 crash in California, leading to the board calling for more regulation of the technology, and for the company to better educate drivers on its limitations.

ADDITIONAL INFO

The road to completely autonomous driving has five levels: Level 0 describes no automation i.e. everyday cars. Level 1 represents features such as adaptive cruise control, while level 2 describes partial automation features that control speed and steering, such as those seen in Tesla vehicles. Level 3 and 4 represent limited driverless capabilities. Level 5 is the point at which a driverless vehicle can navigate all road conditions without human input, according to True Car.

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Elon Musk, Kim Kardashian Endorse Kanye West Running For President

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After years of hints, Kanye West formally announced he is running for president this year in a challenge to Trump, who he once supported, and Democratic rival Joe Biden, winning support from his friend and Tesla CEO Elon Musk.

KEY FACTS

  • Rounding off his Fourth of July, West tweeted on Saturday night: “We must now realize the promise of America by trusting God, unifying our vision and building our future. I am running for president of the United States! #2020VISION.”
  • Musk tweeted in response: “You have my full support!”
  • Wife Kim Kardashian also publicly pledged her support, retweeting West’s statement and adding a U.S. flag emoji.
  • West’s announcement follows years of hints that he would run for office this year which he later postponed to 2024, after publicly declaring at a Fast Company event in 2019: “When I run for president in 2024…We would create so many jobs! I’m not going to run, I’m going to walk.”
  • But the rapper, who recently inked a 10-year deal with Gap through his Yeezy brand, is reportedly yet to file any paperwork to get on state election ballots, while he has missed the deadline for states including Texas, New York, and Indiana.
  • It is not known how serious West’s intentions are this time around, however, he still has time to file as an independent candidate across most states, according to Ballotpedia.
  • West’s declaration was met with skepticism on social media, while some commentators pointed out that it could work out in Trump’s favour.

KEY BACKGROUND

West’s declaration suggests the rapper is looking to cement political ambitions he has expressed throughout Trump’s presidency. West previously forged alliances with Trump, and was pictured in the Oval Office in 2018 wearing a signature Trump ‘Make America Great Again’ cap. He once called the president his “brother” and previously hit back at criticism towards his support for Trump, likening the backlash to racial discrimination. Although he says he didn’t vote in 2016, West later said he “would have voted for Trump”, and earlier this year doubled down, suggesting he would vote for him in November. But that could very well change given Saturday’s announcement.

American rapper and producer Kanye West embraces real estate developer and US President Donald Trump in the White House’s Oval Office, Washington DC, October 11, 2018. West wears a red baseball cap that reads ‘Make America Great Again,’ Trump’s campaign slogan. (Photo by Ron Sachs/Consolidated News Pictures/Getty Images)

TANGENT

West and Musk were pictured together on July 1st, with West tweeting: “When you go to your boys [sic] house and you’re both wearing orange.”

Isabel Togoh, Forbes Staff, Business

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Quote Of The Day

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We have grown past the stage of fairy-tale. As women, we have one common front and that is to succeed. We have to take the bull by the horn and make the change happen by ourselves.

– Folorunso Alakija, Billionaire Businesswoman

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