One of the biggest casualties of the Chinese economic crash, and the resultant collapse in copper prices to 6 year lows, has been Phoenix-based copper mining giant Freeport-McMoRan, whose stock had cratered from a 52-week high of $36 to just under $8 as of a few days ago. The harsh reality of the new normal finally manifested itself on the company early today when FCX announced it was lowering its spending and production in response to plunging copper prices and in addition would cut 10% of its employees.

FCX announced that it now expects $4 billion in capital expenditures for 2016, down from a prior estimate of $5.6 billion. Its 2015 capital expenditure budget currently stands at $6.3 billion.

The company said that it will reduce copper sales by about 150 million pounds per year in 2016 and 2017 and cut 2016 unit site production by 20 percent. It also plans to slash 2016 minerals exploration costs from $100 million to $50 million.

The resultant surge in the company, which exploded by 30% in the regular hours, made many wonder if there wasn't more to the story.

The answer is: yes, there was, and moments ago none other than Carl Icahn announced an 88 million, or 8.46% stake in the copper miner, in a 13D which said that said the company was "undervalued" and that Icahn is now seeking a board seat. To wit from the just filed 13-D:

The Reporting Persons acquired their positions in the Shares in the belief that the Shares were undervalued. The Reporting Persons intend to have discussions with representatives of the Issuer's management and board of directors relating to the Issuer's capital expenditures, executive compensation practices and capital structure as well as curtailment of the Issuer's high-cost production operations. The Reporting Persons may also seek shareholder board representation and to discuss the size and composition of the board.  As of August 26, 2015, the Reporting Persons have not had any discussions with representatives of the Issuer's management or board of directors.

The Reporting Persons may, from time to time and at any time: (i) acquire additional Shares and/or other equity, debt, notes, instruments or other securities (collectively, "Securities") of the Issuer (or its affiliates) in the open market or otherwise; (ii) dispose of any or all of their Securities in the open market or otherwise; or (iii) engage in any hedging or similar transactions with respect to the Securities.

And after soaring 29% in the regular session, FCX was up another 19% in the after hours, which means Icahn is almost in the money on his accumluation which began on July 17.

The reason for Icahn's interest is clear: despite major cash flow problems, FCX only has 3.0x debt/EBITDA which to Icahn means it can lever up at least 2-3 more turns, and use the proceeds to be more shareholder friendly. That the resultant company will inevitably go default is a different matter.

As to how the beleagured company responds, remains to be seen. One thing is clear: Icahn's accumulation pattern which as disclosed in the 13D, is shown below.

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Two words - average down...

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What is also known: any FCX shorts, which are as much as 6% of the float, are not having a good day.

That said, we now wait for an update of what Icahn plans to do with his 11% stake in just as troubled energy company Chesapeake which recently traded at decade lows. Or whether AAPL is still a no-brainer here, after soaring by $120 billion market cap from the Monday flash crash lows.