L TO R: WILF DOYLE/ALAMY; HANS VON NOLDE/AP; AP
FAST-FORWARD
Conqueror Carl
1985: Already one of America’s most feared corporate
raiders, Carl Icahn embarks on a high-profile but ill-fated
purchase of Trans World Airlines. By 1992 it’s bankrupt.
2018: With his TWA diiculties long behind him, Icahn—
restyled as an “activist investor”—is now the planet’s
73rd-richest person, with a net worth of $17 billion.Era of Greed:
March 11, 1985
SIGN OF THE TIMES
Competition Killed the
Video Stars
Sales of blank VCR tapes were
expected to double to more than 200
million units by 1986—but none of the
big manufacturers could make a profit
amid fierce competition. “We all see
this big carrot, and we’re all going after
it.... This is a war!” moaned Richard G.
Mueller, a 3M marketing manager.“IS THERE NO PLACE TO HIDE these days from those
ghouls who want to suck some corporate blood?” asked
Forbes editor Jim Michaels, introducing our cover story on
the boom in blockbuster buyouts. here had been just one
billion-dollar transaction in 1980: Seagram’s sale of Sun
Co. to Texas Paciic. In 1984 Wall Street put together 17
ten-igure deals, capped by Chevron’s $1 3. 3 billion take-
over of Gulf Oil (roughly $ 3 2 billion in 2018 money).
Fueling the frenzy: bank deregulation, undervalued
assets, antitrust leniency and companies newly lush with
cash thanks to 1981 tax-break legislation. Most impor-
tant, perhaps, Wall Street was now lined with inanciers
experienced in handling these mega-acquisitions—irms
such as Drexel Burnham Lambert and Salomon Broth-
ers. “People have learned to do things quickly,” observed
Charles Nathan, a Merrill Lynch executive. “It used to take
weeks to line up bank commitments. Now it can be done
in just a few days.”
Before long, the bankers and raiders would be the
ones wearing masks of anguish. he go-go decade’s high-
water mark came in 1988, when bankers managed nearly
$100 billion (over $200 billion today) in leveraged buy-
outs. But the number of LBOs would fall by nearly 60%
the following year in the wake of a sot stock market and
increased regulatory pressure.AMAZING AD
Good Olds Days
General Motors’
Oldsmobile division
posted record sales
in 1985 for the third
straight year; its Cutlass
Ciera and Cutlass
Supreme, respectively,
ranked as the nation’s
fourth- and tenth-most-
popular models. Overall,
the Detroit giant’s
revenue increased 15%
to $96 billion (some
$227 billion today).FROM THE EDITOR’S DESK
Brown-Bag Hunch
Deputy editor-in-chief Steve Forbes took a dim view
of the increasing prevalence of plastic bags in stores.
“The brown bag will stay,” he predicted in a small item
headlined “Those *!%!*!#* Plastic Bags.” He wasn’t
correct, exactly: Plastic would come to dominate
the end of the checkout line, but given the stuf’s
environmental impact, his instincts were right.FORBES ASIA
FROM THE VAULTBY ABRAM BROWNAPRIL 2018 FORBES ASIA | 47