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Icahn Enterprises L.P.’s stock was down 4.2% to $19.86 on Tuesday, bringing it within sight of its 52-week low of $18.03, which it hit earlier this year after short seller Hindenburg Research published a scathing article about the company.
A New York Times article published Tuesday highlighted the fallout from that report for billionaire activist Carl Icahn and his publicly traded investment arm
IEP,
The Nate Anderson-backed Hindenburg had accused Icahn Enterprises of overstating values and paying a dividend it could not afford. The stock immediately shed billions of dollars in market capitalization, and earlier this month, the company slashed its dividend in half.
“It is very, very embarrassing for Carl because this guy beat him and beat him at his own game,” Mark Stevens, the author of a 1993 book titled “King Icahn: The Biography of a Renegade Capitalist,” told the Times.
The stock shed 30% of its value on Aug. 4, the day Icahn Enterprises announced the halving of its dividend.
“I believe the second quarter partially reflected the impact of short selling on companies we control or invest in, which I attribute to the misleading and self-serving Hindenburg report concerning our company,” Icahn said in a statement at the time.
Hindenburg also revealed that Icahn had borrowed money from his own company, a development that was disclosed in a footnote to financials and that Wall Street had overlooked.
Read: What we know about Carl Icahn’s margin loan
See also: Carl Icahn rebuts short seller Hindenburg Research’s report. It’s already cost his company $6 billion in market cap.
Icahn later finalized amended loan agreements with banks that untied his personal loans from the trading price of his company’s shares.
Icahn Enterprises, which is 84% owned by Icahn and his son, Brett, offers exposure to Icahn’s personal portfolio of public and private companies, including petroleum refineries, car-parts makers, food-packaging companies and real estate. Its unit holders are mostly retail investors.
The fund has performed poorly in the past decade. For many years, Icahn has publicly expressed suspicion of the bull market that has raged around him. He shorted the stock market in a big way as a hedge against his long activist positions. Going into 2021, for example, Icahn’s investment fund had a short exposure of 142%, Securities and Exchange Commission filings show.
In more recent interviews, Icahn has conceded that his short position was a mistake and said that he has committed to returning to his core strategy of activism, which he believes has allowed him free up billions of dollars of shareholder value for himself and others.
What we do is very admirable,” Icahn told the Times in phone interviews that the paper said took place over the past month.
Icahn estimated to the Times that his activist campaigns at a dozen companies, including Apple Inc.
AAPL,
eBay Inc.
EBAY,
PayPal Holdings Inc.
PYPL,
Forest Labs, Herbalife Ltd.
HLF,
and Netflix Inc.
NFLX,
had helped generate $300 billion in additional value for the shareholders of those companies.
For more, see: Carl Icahn admits he was wrong to take a huge short position on the market that lost $9 billion
Icahn Enterprises’ stock has shed 61% of its value in the year to date, while the S&P 500
SPX
has gained 15%.
For more, see: Icahn Enterprises’ stock slides 30% after company halves quarterly distribution to $1 per unit
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