Icahn Enterprises (IEP) is a holding company with a market capitalization of approximately $18 billion, managed by Carl Icahn, a corporate raider and activist investor, and his son Brett, who together own around 85% of the company.
Carl Icahn is a renowned activist investor who is known for acquiring stakes in companies and then unleashing shareholder value. Typically, he accuses corporate executives of mismanagement or wrongdoing and purports to represent the interests of ordinary investors.
By leveraging his reputation, Icahn has propelled Icahn Enterprises, a NASDAQ-listed investment entity with a market capitalization of roughly $18 billion. This vehicle offers investors access to Icahn's personal portfolio, which includes an array of public and private companies, including petroleum refiners, auto parts distributors, food packaging firms, and real estate.
Billionaire investor Carl Icahn faced additional pressure when Hindenburg Research, a short seller, began shorting bonds in Icahn Enterprises LP (IEP). Hindenburg Research stated that Icahn's firm has not resolved any of the significant concerns it had previously raised.
According to the short seller, IEP has suffered further losses amounting to $1.03 billion since the start of the second quarter, adding to its first-quarter losses reported two weeks ago. These losses are attributed to a decline in the values of its public portfolio, which includes companies such as CVR Energy, Bausch Health Companies, and Newell Brands.
The short seller likened the firm to a Ponzi scheme, claiming it paid existing investors an unjustifiably high dividend using the money collected from new investors.
Shares of Icahn Enterprises dropped roughly 5% on the news and are now down more than 40% since Hindenburg publicly revealed its short position in IEP common shares on May 2.
On average, companies targeted by Hindenburg have fallen around -15% the day following a negative report, dropping an average of -26% six months later, according to February calculations by Bloomberg News.
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