Carl Icahn’s empire loses $6 billion in a day after Hindenburg report – Times of India

New York: Carl IcahnThe K empire suffered another blow on Wednesday as shares of his holding company fell further following a critical report by short sellers. Hindenburg ResearchValuations are falling as short sellers pounce on it for over $6 billion.
Hindenburg charged on Tuesday Icahn Enterprises LP (IEP) overvalued its holdings and relied on a “Ponzi-like” structure to pay dividends. Icahn called the report “self-serving” and stood by the statements it made about IEP finances. He did not respond to a request for comment on Wednesday.
Shares of IEP touched a one-day low of $31.78 – its lowest in more than a decade. The company is now worth $11.5 billion, down 35% from its value on Monday before Hindenburg published its report.
Icahn owns about 85% of IEP and has pledged more than 60% of his stake as collateral for a personal loan. According to Forbes, the Hindenburg report wiped $7.5 billion from Icahn’s fortune, giving him a net worth of $10.8 billion.
IEP is scheduled to report its first-quarter earnings on Friday, limiting its ability to comment in detail on its finances.
“Activists tend to short attack days before an issuer reports earnings, as the regulatory quiet period may limit the issuer’s ability to respond and catch up,” said Josh Black, editor-in-chief of Insightia. Activism and Corporate Governance.
Jefferies Financial Group Inc., the only major Wall Street brokerage that covers IEP, declined to comment Wednesday on whether it plans to revise its “buy” rating. Its analyst Daniel Fannon has consistently given this positive rating on IEPs since 2013. Fanon did not respond to requests for comment.
The attack has landed Icahn in uncharted waters. Known for his one-on-one encounters with industry giants such as AIG and McDonald’s Corp, the billionaire has never seen his firm become an active investment target.
Hindenburg has taken on several high-profile targets in recent months, including India conglomerate Adani Group and Jack Dorsey-led digital payments platform Block Inc.
William Ackman, a hedge fund veteran who famously took on Icahn over his antitrust supplement company Herbalife, called the Hindenburg Report a “must-read”.
“This little report has a karmic quality that reinforces the notion of the cycle of life and death,” he tweeted on Tuesday.