(Reuters) – Hindenburg Research, which specializes in short selling, took a short position in Icahn Enterprises (IEP) bonds, saying billionaire Carl Icahn’s investment firm did not respond to questions raised about his “opaque portfolio of investments”.
Hindenburg had accused Icahn Enterprises last week of overvaluing certain assets and relying for the payment of dividends on a “Ponzi pyramid type” structure, a system where the money placed by the latest investors arrives allows returns to be paid. promised to the previous ones.
In response, Carl Icahn said the short seller’s “interested” report was intended to generate profits at the expense of his company’s long-term shareholders.
“Hindenburg Research, founded by Nathan Anderson, would be more apt to call itself Blitzkrieg Research given its wanton destruction tactics,” it said in a statement.
The US billionaire sought to reassure his investors of the safety of the dividend after Hindenburg claimed it was unsustainable.
Icahn Enterprises published a surprise quarterly net loss of 270 million euros on Wednesday and announced that it had been contacted by federal prosecutors, who want information, among other things, on “corporate governance, capitalization, dividends, valuation and marketing materials”.
This is a blow for Carl Icahn, a pioneer of shareholder activism, known to criticize companies for governance and transparency, but who has never had to come under such pressure himself.
For Hindenburg, the latest announcements from Icahn Enterprises raise crucial new questions about margin loans and portfolio losses, he said on Thursday, sending the group’s stock down 3, 51% on Wall Street.
Failure to disclose basic information about margin lending poses a “critical short-term threat to IEP unitholders,” Hindenburg said.
Asked by Reuters, Icahn Enterprises did not immediately respond to a request for comment.
Since the publication of Hindenburg’s note, the price of IEP has fallen by more than 37% and reached an all-time low.
(Niket Nishant and Jaiveer Singh Shekhawat in Bangalore; Laetitia Volga, editing by Blandine Hénault)
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