A short-seller research firm is taking on one of the most legendary investors of all time. And they’re winning.
Hindenburg Research recently released a report saying, “Carl Icahn has built an aura of invincibility around himself—a titan of Wall Street with a knack for coming out on top. But while the focus has always been on his grand public activist campaigns, quieter long-term investment losses, along with the substantial use of leverage, have whittled away his empire.
At this stage, Icahn’s net worth is reliant on selling overpriced IEP units to retail investors while convincing them that they will be rewarded with a consistent, safe dividend in perpetuity, despite extensive evidence to the contrary.
Confidence games never last forever—we expect Icahn Enterprises will be no different.”
The Wall Street Journalnoted the chaos that Hindeberg has caused for Carl Icahn. The newspaper writes, “Icahn Enterprises IEP, the publicly traded firm controlled by Mr. Icahn, was targeted by short seller Hindenburg Research early this month. The next day, the U.S. Attorney’s Office for the Southern District of New York contacted Icahn Enterprises asking for information about the value of its assets, corporate governance, dividends and other topics, the firm said in a securities filing Wednesday.”
“Icahn Enterprises said in the filing that it is cooperating with the investigation and doesn’t believe it will have a significant impact on the business. The firm’s shares declined 15% Wednesday and are down 36% since the report.”
The report has caused other problems for the legendary investor. Now his company has federal investigators sniffing around his holdings.
CNBC reports that investigators sought information a day after notable short seller Hindenburg Research took a short position against Icahn’s company. Hindenburg alleged “inflated” asset valuations last Tuesday, among other reasons, for what it says is an unusually high net asset value premium in shares of the publicly traded holding company.
“The U.S. Attorney’s office has not made any claims or allegations against us or Mr. Icahn with respect to the foregoing inquiry,” Icahn Enterprises said in the 10-Q filing.
Icahn Enterprises L.P. on Wednesday issued a firm rebuttal against the report, saying, “Hindenburg Research, founded by Nathan Anderson, would be more aptly named Blitzkrieg Research given its tactics of wantonly destroying property and harming innocent civilians,” said Carl Icahn, chairman of the IEP board, in a statement.
Anderson’s modus operandi, Icahn continued, is to “launch disinformation campaigns to distort companies’ images, damage their reputations and bleed the hard-earned savings of individual investors. But, unlike many of its victims, we will not stand by idly. We intend to take all appropriate steps to protect our unit holders and fight back.”