- Legendary investor Carl Icahn’s wealth dropped by $10 billion after a short-seller’s allegations.
- Hindenburg Analysis launched a report alleging “Ponzi-like” financial buildings at Icahn Enterprises.
Activist investor Carl Icahn’s wealth plunged by $10 billion on Tuesday after Hindenburg Analysis — a short-seller that took on certainly one of Asia’s richest males earlier this yr — focused Icahn Enterprises with a scathing report.
Whereas disclosing a brief place towards Icahn Enterprises, New York-based Hindenburg claimed that the Wall Avenue legend’s holding firm used inflated asset valuations, additional alleging “Ponzi-like” financial buildings on the agency.
Hindenburg additionally stated within the report Icahn Enterprises has been “utilizing cash taken in from new traders to pay out dividends to outdated traders.” The allegations despatched the corporate’s share costs tumbling by 20% after the opening bell on Tuesday.
As Icahn derives his wealth from an 89% stake in Icahn Enterprises, his fortune was hit by the rout. He’s now price $14.6 billion — that is 41% of his internet price on Monday — in line with the Bloomberg Billionaires Index.
Icahn Enterprises responded to the allegations on the identical day, saying Hindenburg Analysis’s report is “self-serving” and “supposed solely to generate earnings on Hindenburg’s quick place on the expense of IEP’s long-term unitholders.”
It additional stated the corporate “operates from a place of energy” and has about $2 billion of money and cash-equivalents on its stability sheet as of March 21.
Shares of Icahn Enterprises closed 20% decrease at $40.36 on Tuesday. They had been down 0.9% in after-hours commerce.
Icahn is the third public determine to be focused by Hindenburg Analysis this yr. On January 24, the short-seller shocked the markets when it alleged that India’s Adani Group had “engaged in a brazen inventory manipulation and accounting fraud scheme over the course of a long time.”
The report hit investor sentiment and despatched Adani-related shares right into a tailspin, which misplaced over $150 billion in worth in about 5 weeks, per Bloomberg.
Even founder Gautam Adani’s internet price halved to about $62 billion now from $121 billion earlier than the report, per Bloomberg Billionaires Index. Adani is now the third richest particular person in Asia after India’s Mukesh Ambani and China’s Zhong Shanshan.
In March, Hindenburg teased one other report, tweeting it was going to release a “new report soon.” It adopted up with a report on funds firm Block — co-founded by Twitter based Jack Dorsey — stating that the corporate misled traders “with inflated metrics” and facilitated fraud.
Dorsey’s internet price tumbled by $526 million in a single day following the report.
Hindenburg Analysis didn’t instantly reply to Insider’s request for remark despatched exterior common enterprise hours. Insider was unable to achieve Icahn Enterprises by way of cellphone exterior common enterprise hours.