Skip to content

Icahn Enterprises LP on Wednesday strongly denied a short-selling report accusing it of inflating asset values ​​that has shaved nearly $6 billion off the company’s market capitalization in a matter of weeks.

“Hindenburg Research, founded by Nathan Anderson, would be more aptly named Blitzkrieg Research given its tactics of wantonly destroying property and harming innocent civilians,” IEP board chairman Carl Icahn said in a statement.

Anderson’s modus operandi is to “launch disinformation campaigns to misrepresent companies, damage their reputations, and bleed the hard-earned savings of individual investors. But, unlike its many victims, we will not stand idly by. We intend to take all appropriate steps to protect and counterattack our units,” Icahn said.

The denial came shortly after IEP on Wednesday disclosed a federal investigation into its corporate governance and other issues.

In its 10-Q filing with the Securities and Exchange Commission, IEP said the U.S. Attorney’s Office for the Southern District of New York contacted it on May 3 seeking information on corporate governance, capitalization, securities offerings, dividends, valuation, marketing materials. due diligence and other materials.

“We are cooperating with the inquiry and providing documents in response to a voluntary request for information,” the company said in a statement.

Moreover. Icahn’s investment firm reveals federal probe, and earnings ask zero questions

In his rebuttal to the Hindenburg report, Icahn acknowledged that the investment sector has underperformed in recent years, which he blamed on a bearish view of the market and large net short positions.

“We have recently taken steps to reduce short positions in our hedge book and focus largely on the activism that has served us so well in the past. We believe our existing portfolio has significant upside potential in the coming years,” he said.

Previous activist campaigns at Icahn’s company have generated billions of dollars for shareholders and helped boards and CEOs capture untapped value, Icahn argued, citing Reynolds, Netflix.

NFLX:

,
Forest Labs, Apple

AAPL:

,
CVR Energy

CVI:

,
Herbalife:

KTS:

,
eBay:

EBAY:

,
Tropicana, Cheniere

LNG:

and western

OXY:

as examples.

“We expect that over time IEPs

IEP:

the performance will speak for itself. We have a strong balance sheet with $1.9 billion in cash and $4 billion in additional liquidity and are ready to take advantage of all opportunities,” the statement said.

IEP, which is 84% ​​owned by Icahn and his son Brett, offers access to Icahn’s personal portfolio of public and private companies, including oil refineries, auto parts manufacturers, food packaging companies and real estate. : Its shareholders are mostly retail investors, meaning the loss of market capitalization caused by the report hurt those retail investors, Icahn said.

Icahn also disputes the report’s claim that IEP’s net asset value, or NAV, premium that sets it apart from peers is not justified. Hindenburg compared IEP to both Dan Loeb’s Third Point, which operates a similar public investment vehicle and trades at a 14% discount to its NAV, and Bill Ackman’s Pershing Square, which trades at 35 % discount. “Comparing IEP to closed-end funds as ‘peers,'” Icahn said, “is a perfect example of comparing apples to oranges.”

Both the Loeb and Ackman funds charge fees, including management and carried interest. But IEP charges no fees and pays no salary or any other compensation to Icahn himself.

One of the more controversial parts of the Hindenburg report was the issue of the margin loan Icahn took out for his stake in the IEP. The personal debt was fully disclosed by Icahn in securities filings, but few on Wall Street noticed.

Read also: What do we know about the Carl Icahn Margin Loan?

It was first disclosed in a February 2022 10-K filing for the disclosure that Icahn owns 257 million units of Icahn Enterprises. The company said 168 million of those units were “pledged as collateral to secure certain personal debts.”

The filing does not specify the purpose of the loan or where the proceeds went, but it does indicate that Icahn had “sufficient additional assets to meet the obligations associated with these loans without recourse to depository institutions.”

Icahn said Wednesday that it and its affiliates are “up-to-date and in full compliance with all personal loans.”

[ad_2]

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *