Seeking Alpha

Icahn Enterprises tumbles for a 2nd day

  • "If Carl Icahn is selling, do you want to be buying," asks Andrew Bary in Barron's. "Probably not." Icahn Enterprises (IEP -13.6%) extends yesterday's big post-secondary offering decline as Bary reminds the stock trades at a hefty premium to NAV of about $75 per unit.
  • While it might be worth some premium to invest alongside Carl Icahn, says Bary, 80% is probably far too much (it's less since the article was published!).
  • By contrast, you can invest with the Tisch family in Loews (L -1.3%) at a discount to NAV, and Berkshire Hathaway (BRK.A, BRK.B) trades at just 1.3x book.
  • "Icahn can do the math and he seems to think the company's units are at least fully priced given the equity offering, which will add to his war chest as he pursues his distinctive brand of activist investing."
Comments (11)
  • idkmybffjill
    , contributor
    Comments (1557) | Send Message
     
    He obviously thought his stock was over priced, hence him diluting it. He has publicly mentioned before that he is hedged and remains cautious about the market - so this is a rest time to sell more shares. Sell when overvalued, buy back when undervalued.
    11 Dec 2013, 12:22 PM Reply Like
  • Big WN
    , contributor
    Comments (5) | Send Message
     
    Icahn is NOT selling any personal shares, he still owns all HIS shares, the company is selling some shares to invest in more companies. The people that say sell are mad they missed the most recent move and are trying to get the price down to buy in. The last two times the company sold shares earlier this year were substantially lower and Carl used the money to invest very profitably!!!
    11 Dec 2013, 12:48 PM Reply Like
  • aretailguy
    , contributor
    Comments (1017) | Send Message
     
    Since Icahn owns what, 85% of all shares, there is not much difference between his personal interest and IEP. I was buying at between 95-100 and sold between 118 and 122. No position now but looking more and more attractive all the time.
    11 Dec 2013, 12:53 PM Reply Like
  • Big WN
    , contributor
    Comments (5) | Send Message
     
    I agree it has been a good trade for me and my family, but even if he owns most of the company, he has not reduced any of his holding, so he is being hit also. If he was selling then I would be concerned! It just bothers me that all these pundits are saying HE is selling... He actually is being hurt like any current holders and the people being hurt the most are the ones that purchased the stock at the offer price of 144.00.
    11 Dec 2013, 01:06 PM Reply Like
  • idkmybffjill
    , contributor
    Comments (1557) | Send Message
     
    Big, I never said he was selling his own shares. In fact, no one said he's selling his shares. What he is doing is selling additional shares to raise cash. Do you notice that I said him DILUTING it? (that means equity issuance!)
    11 Dec 2013, 03:53 PM Reply Like
  • aretailguy
    , contributor
    Comments (1017) | Send Message
     
    This stock is a buy @$80-$90/share. Easy pickings for Carl above that.
    11 Dec 2013, 12:47 PM Reply Like
  • Doug-
    , contributor
    Comments (351) | Send Message
     
    The last 2 secondary offerings saw large drops in price. Both times they recovered. That is how most secondary offerings work. Wait until the secondary offering closes and then buy. The PE is only 15 and the yield is over 4%. This stock has increased on average 31% a year since inception. If the NAV grows at 31% for 3 years that would bring the NAV to $170 a share. Last quarter the earnings were up over 400% so this time it looks like these past numbers will all be surpassed. Strong support at about $110. $200 is a reasonable target.
    11 Dec 2013, 01:01 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2482) | Send Message
     
    This was under $80 in October. Maybe a buy at 1.3x NAV, which is around $100, but maybe not. We'll see where this knife lands.
    11 Dec 2013, 01:56 PM Reply Like
  • Micah
    , contributor
    Comments (462) | Send Message
     
    Carl was on the cover of Time Magazine this week and called "The Most Important Investor".

     

    This is like "The Madden Curse" http://goo.gl/ry83cx
    11 Dec 2013, 01:06 PM Reply Like
  • ReligiousWacko
    , contributor
    Comments (874) | Send Message
     
    the ultimate pump and dumper
    11 Dec 2013, 01:48 PM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (695) | Send Message
     
    Green mailer and corporate raider!
    11 Dec 2013, 02:04 PM Reply Like
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