(FORTUNE Magazine) – At a gala celebration at Manhattan's Time Warner Center last fall, observers wondered what Carl Icahn was up to. Pumping a Time Warner executive beside him for information, he furiously scribbled notes, drawing arrows next to numbers as he calculated the media conglomerate's breakup value. Icahn sniped over dinner that Time Warner's stock had gone nowhere since Dick Parsons took over as CEO. Now, after boosting his stake in the company and cornering Parsons for an hourlong tête-à-tête, observers are still scratching their heads. After all, Time Warner (parent of FORTUNE) is hardly a prototype Icahn target. According to his hedge fund prospectus, obtained by FORTUNE, Icahn is looking for companies suffering from "litigation, complex contingent liabilities, corporate malfeasance, and weak corporate governance...." Sounds like Time Warner a few years ago--but not today. Icahn hates to back down, but Parsons is no pushover either (one media CEO describes him as prodding adversaries "with a velvet glove"). Our prediction: Icahn will get some of what he wants. Parsons may not be averse to buying back more stock, and he might even agree to sell more of the company's cable division to the public. But he is unlikely to relinquish control of cable entirely: Time Warner brass still think the business is a winner. Icahn has, however, notched one victory already: Since Aug. 1, the stock is up more than 6%. -- Stephanie N. Mehta