Icahn: Hindenburg shorts Icahn Enterprises bonds as battle with billionaire heats up


Billionaire investor Carl Icahn came under renewed pressure Thursday as a short seller Hindenburg research began shorting bonds at Icahn Enterprises LP (IEP) and said Icahn’s firm failed to address all of the key issues it raised.
Hindenburg’s latest move comes after IEP reported a surprise loss on Wednesday and said it was contacted by US prosecutors on May 3, a day after Hindenburg accused IEP of overreporting its finances and relying on a ” to leave the Ponzi-like structure.
At that time, Icahn called the report “self-serving” and promised to take action to “fight back”.
Hindenburg’s reports are a setback for Icahn, a pioneer of shareholder activism known for associating with heavyweights like AIG and McDonald’s Corp. and to address issues related to governance and transparency.
Icahn’s latest revelations raise critical new questions about margin lending and ongoing portfolio losses, the short seller said Thursday, sending shares of the investment firm down over 6%.
Icahn Enterprises did not immediately respond to a request for comment.
“We are short units of Icahn Enterprises and have initiated a short position in IEP bonds,” said the short seller, whose reports on companies have often lost much of their value.
The failure to disclose basic details about the margin loans poses a “critical near-term threat to IEP shareholders,” Hindenburg claimed.
Icahn owns about 84% of IEP and had pledged more than 65% of its stake as collateral for margin loans for “unspecified purposes,” the short seller said.
The short seller said that in addition to the first-quarter loss reported by IEP this week, Icahn’s company has suffered an additional $1.03 billion in losses since the start of the second quarter, attributed to falls in values ​​in its public portfolio such as CVR Energy and Bausch be healthcare company and Newell brands .
All three stocks are down at least 24% this quarter, Refinitiv data showed.

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