A Wounded Carl Icahn Makes His Play at a Struggling Illumina

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Carl Icahn might be down, but he’s not out. The legendary activist investor, 87—who has seen the stock of his investment company,

Icahn Enterprises
,
plunge after an attack by short-seller Hindenburg Research and a possible federal probe—squares off on Thursday in a proxy fight at

Illumina
,
the dominant developer of gene-sequencing technology. Illumina has been mired in a messy attempt to buy its former unit, cancer screener Grail.

Illumina’s achievement has been to slash the cost of gene sequencing over the past 15 years, fueling an explosion of applications. In mid-2021, CEO Francis deSouza pursued Grail in a diversification move, closing the $7.1 billion deal without waiting for U.S. and European approvals. Regulators weren’t pleased; litigation continues. The stock fell 63% between the closing and Icahn’s proxy announcement.

Icahn wants three board seats, giving him a say, but not control, and the removal of deSouza and Chairman John Thompson. He says Illumina should sell Grail, calling the decision to close the deal “egregious and inexplicable.” In a letter, he said Illumina should focus on growing its core sequencing business—and he raised other issues, including deSouza’s pay. Icahn got a boost when proxy advisor Glass Lewis supported him, though Institutional Shareholder Services recommended only one Icahn nomination.

Icahn needs a win. Hindenburg argued that Icahn Enterprises had inflated values of some of its private companies. IE took a $270 million first-quarter loss, shares are down some 36% since Hindenburg’s report, and Icahn admitted a $9 billion short-selling loss to the Financial Times. So far, major shareholders have said nothing.

Write to Josh Nathan-Kazis at [email protected]

Next Week

Monday 5/22

Heico

and

Zoom Video Communications

release earnings.

Ford Motor

hosts a capital markets day in Dearborn, Mich.

JPMorgan Chase

holds an investor day in New York.

Tuesday 5/23

Agilent Technologies
,

AutoZone
,

Intuit
,
Lowe’s,

Palo Alto Networks
,
and

V.F.
Corp.
report quarterly results.

The Census Bureau releases new residential sales data for April. The consensus estimate is for a seasonally adjusted annual rate of 650,000 new single-family homes sold, 33,000 fewer than in March. Still, new-home sales have rebounded from last summer’s postpandemic low of 543,000.

S&P Global releases both its Manufacturing and Services Purchasing Managers’ Indexes for May. Expectations are for readings of 50 for the Manufacturing

PMI

and 52.6 for the Services PMI. Both figures would be slightly below April’s.

Wednesday 5/24

Nvidia

reports first-quarter fiscal-2024 results. Shares of the largest semiconductor company by market value are up 114% this year, making it the best performer in the S&P 500 index. Wall Street sees the chip maker as a long-term winner in the emerging artificial-intelligence field.

Analog Devices, Bank of Montreal,

Bank of Nova Scotia
,
and Snowflake release earnings.

PG&E

and

Thermo Fisher Scientific

hold investor days in San Ramon, Calif., and New York, respectively.

The Federal Open Market Committee releases the minutes from its early-May monetary-policy meeting.

Thursday 5/25

Autodesk
,

Best Buy
,

Canadian Imperial Bank of Commerce
,

Costco Wholesale
,

Dollar Tree
,

Marvell Technology
,

Medtronic
,

Royal Bank of Canada
,

Toronto-Dominion Bank
,

Ulta Beauty
,
and Workday hold conference calls to discuss quarterly results.

Zoetis

hosts an investor day in New York.

The Bureau of Economic Analysis reports its second estimate of first-quarter gross-domestic-product growth. The consensus call is for a seasonally adjusted annual growth rate of 1.1%, unchanged from the preliminary estimate released in April.

Friday 5/26

The BEA reports personal income and expenditures for April. Economists forecast both income and spending increases of 0.4%, month over month. This compares with a gain of 0.3% and a flat reading, respectively, in March. The core personal-consumption expenditures price index is seen rising 4.4% year over year, two-tenths of a percentage point less than previously.

The Census Bureau releases the durable goods report for April. New orders for durable manufactured goods are expected to be down 1% from March’s total, to $273.6 billion.

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