If you are looking at Icahn Enterprises ( IEP -0.60% ) stock as a potential investment because it has a huge 20%-plus dividend yield, then stop. The dividend yield is not the main reason why anyone should be buying this partnership.
The biggest reason to own it is because you want to invest alongside Carl Icahn. But there are some complications around that fact that you need to consider. Who is Carl Icahn? Carl Icahn is one of a small number of truly iconic Wall Street mavens.
His claim to fame is the activist approach he takes, stepping into troubled situations and pushing for change to improve business performance. He's had some very high-profile wins over the years, with his approach at airline TWA being something of an imperfect example of what he does now within Icahn Enterprises. With TWA, he effectively took over the company, installed himself as CEO, took the company private, and then started to make material business changes (including selling off valuable assets).
To be fair, TWA ended up in bankruptcy court, which isn't Icahn's goal with Icahn Enterprises' investments, but he did make a lot of money with his investment in TWA. The real takeaway is that he usually gets involved in a big way when he buys a company. This is very different from investors who have a more standoffish approach ( Warren Buffett ) or ones who prefer to simply work with management (Nelson Peltz).
Once you know this, you can start to consider the buy, sell, or hold decision around Carl Icahn'.
