NEW YORK — Stock market sources suggested Thursday that Carl C. Icahn has been accumulating a heavy stake of as many as 4 million shares, or about 1.6%, in USX Corp., meaning Icahn could be the second corporate raider to threaten the nation's largest steel company.
USX, the company formerly known as U.S. Steel, disclosed Aug. 20 that Australian businessman Robert Holmes a Court planned to buy as much as 15% of its stock. Under federal takeover laws, Holmes a Court was free to start buying USX stock this week.
Icahn's activity as a USX buyer was unconfirmed. He was unavailable for comment. But market observers said that the pattern of trading in USX stock for the last week has strongly suggested that someone is assembling a position.
Among other things, USX's price remained relatively buoyant on heavy volume in the teeth of record bear markets last Thursday and Friday.
On Thursday, USX was the second most heavily traded stock on the New York Stock Exchange, closing at $22.875, up $1.12, on volume of 4.1 million shares. Late in the day, a block of 1.8 million shares was traded at $23 a share by the brokerage of Jeffries Group, a Los Angeles-based firm that specializes in trading large blocks for institutional and professional investors.
Steel industry observers were mystified at what strategy an investor such as Icahn might pursue with USX, which is burdened by heavy debt, rock-bottom prices in its principal businesses of steel and oil, and a 6-week-old steelworkers' strike.
Icahn, whose last acquisition was the airline TWA, has often bought threatening stakes in companies to cajole them into buying him out at a profit.
Analysts say USX faces better prospects with its oil business, where prices might rise, than with steel, where prices will probably remain depressed amid rising costs.
"The way to achieve value with USX would be to separate the steel and the oil businesses, but you'd still have to do something about the steel business," said Peter L. Anker, an analyst at First Boston Corp. Closing some of USX's outdated steel plants would add more costs, he said, from severance and pensions.