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Update 3:10pm: Adds Icahn response to short report.
Carl Icahn's Icahn Enterprises (NASDAQ:IEP) plunged 21% after a new short report from Hindenburg Research.
Hindenburg has taken a short position in the units of Icahn Enterprises and alleges the IEP units are "inflated," according to the short report released on Tuesday.
"Overall, we think Icahn, a legend of Wall Street, has made a classic mistake of taking on too much leverage in the face of sustained losses: a combination that rarely ends well," Hindenburg wrote in the report.
Icahn responded to the Hindenburg short report in a statement, saying the company stands by its public disclosures.
"We believe the self-serving short seller report published by Hindenburg Research today was intended solely to generate profits on Hindenburg's short position at the expense of IEP's long-term unitholders," Icahn said in the statement. "We stand by our public disclosures and we believe that IEP's performance will speak for itself over the long term as it always has. Today, IEP operates from a position of strength with approximately $2 billion of cash and cash-equivalents on its balance sheet as of March 31, 2023 to execute on our strategy."
Icahn added that the claims in the short seller report "will not deter IEP from fulfilling its commitments to IEP's unitholders and employees."
Icahn Enterprises (IEP) is a holding company that has seven primary business including energy, investment, automotive, food packaging, real estate, home fashion and pharmaceuticals.
Well-known hedge fund titan and billionaire Bill Ackman, who had a famous showdown a decade ago with Icahn on CNBC over Ackman's Herbalife (HLF) short call, appeared to put himself into the fray with a tweet on Tuesday.
"There is a karmic quality to this short report that reinforces the notion of a circle of life and death," Ackman tweeted. "As such, it is a must read."
Icahn Enterprises is set to report Q1 results on Friday. IEP has a market cap of $17.8 billlion.
Hindenburg Research is one of the most high profile short sellers in the past few years and is well known for its short call on electric vehicle maker Nikola Corp. (NKLA) as well as Lordstown Motors (RIDE) and recently targeted Block Inc. (SQ) with a short call.
Also see SA contributor Pacifica Yield's piece from March entitled "Icahn Enterprises: I'm In Pursuit Of Income With Its 15.7% Yield."