Last Update: May 03, 2023, 02:05 AM IST
Famous activist investor Carl Icahn. (Image: Hindenburg Research / Twitter)
The Hindenburg report is the latest in a series of detailed investigations that have been carried out on some of the biggest names in business
A critical report by US short seller Hindenburg Research on renowned activist investor Carl Icahn’s holding company led to a drop in its share price on Tuesday.
The Hindenburg report is the latest in a series of detailed investigations involving some of the biggest names in business, including Indian tycoon Gautam Adani’s business empire and Jack Dorsey-backed payments company Block.
The release of a report highly critical of Icahn Enterprises’ business practices sent its share price plummeting more than 25 percent on Tuesday afternoon.
Short sellers like Hindenburg bet on a fall in stock prices, with the potential for a big payoff if they do.
The report alleged that Icahn Enterprises had “inflated” the value of its assets, and that “Icahn is using money raised from new investors to pay dividends to older investors.”
Icahn Enterprises did not immediately respond to AFP’s request for comment.
Hindenburg wrote in his report, “Such Ponzi-like economic structures are sustainable only to the extent that new money is willing to take the risk of being the last to ‘catch the bag’.”
“Overall, we think Wall Street veteran Icahn has made a classic mistake of taking too much leverage in the face of sustained losses: a combination that rarely ends well,” he said.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
