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Irwin Jacobs, the corporate raider once known as "Irv the Liquidator," is back. But now the only thing he wants to liquidate is short-sellers of insurance giant


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In an attempt to pit shareholders of Conseco against the short-sellers he says are holding down the insurance company's potential stock value, Jacobs took out a $77,406.96 advertisement in

The Wall Street Journal

Friday. In a letter, he urged holders of Conseco to stop lending the shares to short-sellers.

Short-sellers are investors who sell stocks borrowed for a fee from shareholders. By selling stock they do not own, short-sellers can profit from a decline in the share price by buying the stock later at a lower price.

Because short-selling only works when shares are available to borrow, Jacobs urged Conseco investors to stop lending shares from their portfolios. If they did so, they would create a "short squeeze" in which short-sellers would be forced to buy back shares as prices rise and eliminate their short positions.

The unusual advertisement comes a day after Gary Wendt, Conseco's

recently-hired chief executive

announced a major restructuring for the company. Jacobs says he will run similar ads in Sunday's

New York Times

and Monday's

Wall Street Journal


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Jacobs owns between 4% and 5% of Conseco shares, but said in an interview that he is battling the short-sellers for his own personal profit. Jacobs bought the roughly 11 million shares back in May, when the stock was near its 52-week low of $4.50 a share. The share price has since nearly doubled from that low.

"I'm just trying to allow Wendt to restore the full value to the shareholders of this company, and the mass of shorts in the stock are standing in his way," said Jacobs in an interview.

Conseco shares rose 15/16, or 9.93% on Friday to close at 8 1/2.

"You've got to believe that the value of this company is more than it's priced at," said Jacobs. "I knew that before ever knowing Gary Wendt would come in and implement such a solid plan. I have full confidence in Wendt's ability to turn the company around, so the current share price is basically a license to steal."

Jacobs in part blames the huge number of shares sold short, roughly 63 million of the firm's total 325 million outstanding shares, for the stock's low value.

"If there is good news, they wait for a rise, then sell. If there is bad news, they sell," said Jacobs. "Portfolio managers are out there holding the stock, while their back offices are lending it out to shorts who are keeping the share value low. They're shooting themselves in the foot and I'm trying to make them aware of that."

In his heyday, Jacobs' strategy was to buy undervalued companies, break them up and sell the parts at a profit. He says that he had eyed Conseco earlier this year for that purpose.

But following a rout of Conseco's executive structure that involved the

ouster of founder and chief executive Steven Hilbert, Jacobs decided his best strategy would be to take a stake in the company and bet that the undervalued company can return to the insurance and financial services giant it once was.

"This is not a hostile environment today," said Jacobs. "We don't have the time to do things today that you did in the 1970s and '80s. It's too fast-moving and too competitive an environment."

Conseco's recent restructuring plan is meant to reverse several years of ill performance for its

Conseco Finance

unit, formerly

Green Tree Financial

, which Conseco bought in 1998.

The acquisition of the company, which lends mainly to sub-prime borrowers and is the largest U.S. financier of manufactured trailer homes, has caused headache and heartache for the company and its shareholders via defaults and other credit problems.