On May 2, 2023, well-known short-seller Hindenburg Research issued an investigative report on Icahn Enterprises L.P., the “~$18 billion market cap holding company run by corporate raider and activist investor Carl Icahn, who, along with his son Brett, own approximately 85% of the company.” The Hindenburg report states that “Icahn Enterprises’ current dividend yield is ~15.8%, making it the highest dividend yield of any U.S. large cap company by far, with the next closest at ~9.9%,” and alleges that “the dividend is entirely unsupported by IEP’s cash flow and investment performance, which has been negative for years.”
Hindenburg “estimate[s] that IEP’s last reported indicative year-end NAV of $5.6 billion is inflated by at least 22%, due to a combination of overly aggressive marks on IEP’s less liquid/private investments and continued year to date underperformance.”
Shares of Icahn Enterprises L.P. dropped by more than 20% in intraday trading on May 2, 2023.
Then before the market opened on May 10, 2023, Icahn Enterprises announced financial results for Q1 2023 and disclosed that on May 3, 2023 the U.S. Attorney’s office for the Southern District of New York contacted the company seeking information relating to affiliates, corporate governance, capitalization, securities offerings, dividends, valuation, marketing materials, due diligence and other materials.
Shares of Icahn Enterprises L.P. dropped by more than 15% in intraday trading on May 10, 2023.
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