Carl Icahn’s empire loses $6 billion in one day after short seller report

(Reuters) – Carl Icahn’s empire was dealt another blow on Wednesday when shares of his holding company fell further in the wake of a monetary report from short research firm Hindenburg, which brought the value of the decline since the short seller attacked it to more than $6 billion.

Hindenburg on Tuesday accused Icahn Enterprises LP (IEP.O) of overvaluing its holdings and relying on a “Ponzi-like” structure to pay dividends. Icahn called the report “self-serving” and endorsed the IEP’s statements about its finances. He did not respond to a request for comment on Wednesday.

IEP shares hit an intraday low of $31.78 — their lowest in more than a decade. The company is now valued at $11.5 billion, 35% less than it was valued on the Monday before Hindenburg released its report.

Icahn has about 85% of the IEP and I have Pledge more than 60% His share as collateral for personal loans. The Hindenburg Report wiped out $7.5 billion from Icahn’s fortune, making him a net worth of $10.8 billion, according to Forbes.

The IEP is scheduled to report its first-quarter earnings on Friday, which restricts its ability to comment in detail on its finances in advance.

said Josh Black, editor-in-chief of the magazine insightwhich provides data on shareholder activity and corporate governance.

Jefferies Financial Group Inc (JEF.N), the only major Wall Street brokerage that covers an IEP, declined to comment on Wednesday on whether it had plans to revise its “buy” rating. Its analyst Daniel Fannon has consistently given this positive rating on the IEP since 2013. Fannon did not respond to requests for comment.

The attack plunged Aikan into uncharted waters. Known for his encounters with industry heavyweights such as AIG (AIG.N) and McDonald’s Corp (MCD.N), the billionaire never saw his company as a target for active investment.

The Hindenburg has taken several high-profile targets in recent months, including India’s Adani Group and digital payments platform Block Inc (SQ.N) led by Jack Dorsey.

William Ackman, a hedge fund veteran best known for his feuds with Icahn over their opposition to the nutritional supplement company Herbalife, called the Hindenburg Report a “must read.”

“There is a karmic quality in this short report that reinforces the idea of ​​the circle of life and death,” he wrote on Twitter on Tuesday.

Additional reporting by Nikit Nishant in Bengaluru; Edited by Soumiadeb Chakrabarti

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