Carl Icahn, Activist Investor, Becomes Target of Short Seller
Hindenburg Research says Icahn Enterprises is like a "Ponzi-like economic structure."

Carl Icahn, a corporate raider, activist shareholder and corporate titan, has shook up Wall Street for nearly half a century. He made corporate titans submit to his demands, and changed their business strategies.
Hindenburg Research - the short seller company that made its name by taking on Indian tycoon Gautam Adani, and Twitter cofounder Jack Dorsey in recent years - became the target of Icahn Enterprises on Tuesday.
Hindenburg claimed that Icahn Enterprises was overvalued. The company is trading well above its net assets value, unlike other financial vehicles managed by William A. Ackman or Daniel S. Loeb. Hindenburg criticized a hefty, unjustifiable dividend that was financed through stock sales.
Hindenburg stated in a report that 'Icahn is using the money taken from new investors to give dividends to older investors'. It compared Icahn Enterprises with a 'Ponzi like economic structure' which survives only if new investors are willing 'to be the last to hold the bag'. Hindenburg stated that it was betting on the fall of Icahn Enterprises shares, which would allow it to make a profit.
The stock of the company fell 20 percent on Monday and nearly 2 percent during premarket trading Wednesday.
Hindenburg called Jefferies out as well, saying that it was the only major investment bank that published research on Icahn Enterprises and helped the company to sell its stock.
Icahn Enterprises replied by stating that they stand by their disclosures. Hindenburg Research published a self-serving report today that we believe was only intended to make Hindenburg profit on its short position, at the expense I.E.P. The company released a statement saying that the long-term holders of I.E.P.
In just a few short years, Hindenburg, and its founder Nathan Anderson, rose to prominence through the publication of critical research papers about high-flying corporations. The company has had great success. Nikola, a maker of electric vehicles, fired its founder when Hindenburg accused them of fraud. And companies within Mr. Adani’s business empire have lost billions after Hindenburg claimed they committed stock manipulation and other wrongdoings.
Hindenburg received one notable endorser, Mr. Ackman. A hedge fund mogul, Mr. Ackman famously clashed against Mr. Icahn about the prospects of Herbalife - the supplement company Mr. Ackman shorted. The two billionaires fought on CNBC, a fight that gripped Wall Street in 2013.
The wounds may have not been healed by time. Ackman said that Hindenburg's short report had a "karmic" quality, which reinforced the idea of a cycle of life and deaths. As such, this report is a must read.