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Bill Ackman Joins Attack Against Carl Icahn after Emergence of Hindenburg Report

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 By: Ellen Cans

As Billionaire Carl Icahn and his holding company Icahn Enterprises are reeling from a negative report from Hindenburg research, another old nemesis has stepped in, to make matters worse.

As reported by the NY Post, Bill Ackman made a long winding post attacking Icahn on Twitter.  “I have been fascinated by the@HindenburgRes $IEP situation, and there are some interesting learnings here,” Ackman Tweeted on Wednesday, noting short-seller Hindenburg’s comments that Icahn’s premium had been sustained by a large dividend yield.

Ackman, the 57-year-old billionaire investor and hedge fund manager who is the founder and CEO of Pershing Square Capital Management, said the rich dividends to lure investors jeopardized the fund’s value.  “The yield is generated by returning capital to outside shareholders, which is in turn funded by the company selling stock to investors,” Ackman said. “$IEP reminds me somewhat of Archegos where the swap counterparties were comforted by each having relatively smaller exposures to the situation,” Ackman said, referencing Bill Hwang’s hedge fund firm which busted in 2021.  “All it takes is for one lender to break ranks and liquidate shares or attempt to hedge, before the house comes falling down,” Ackman added. “Here, the patsy is the last lender to liquidate.”

In early May, Hindenburg had published a report claimed that Icahn Enterprises has been using inflated asset valuations, and alleged “ponzi-like economic structures”.  The report went on to add that Icahn’s current dividend yield of 15 percent, is among the highest on Wall Street, adding the claim that it “is entirely unsupported by IEP’s cash flow and investment performance, which has been negative for years.”

The holding company has been reeling since then, with stock shares tumbling over 50 percent since the report came out.  On Wednesday, Ackman’s comments led to a further 13 percent drop in share prices, with the stock reaching a 14 year low, per the Post.  Mr. Icahn, 87, has seen his own net worth drop some 60 percent, falling from$25 billion to $10 billion, as a result.

Ackman had taken his Tweet on Wednesday a step further personally attacking Mr. Icahn. He repeated one of Icahn’s favorite sayings, “If you want a friend, get a dog.”  Then Ackman wrote, “Over his storied career, Icahn has made many enemies. Idon’t know that he has any real friends. He could use one here.”  Ackman has an estimated net worth of $3.5billion, per Forbes.

 

 

 

Shortly after Ackman’s public tweet, the Post spoke to Mr. Icahn who seemed stunned by the scornful comments.  “I don’t know what I’m going to do about this,” Icahn told The Post.  Icahn didn’t divulge why Ackman would want to attack him, saying only that he may release a statement at a later time.  Per the Post, the two business moguls have a long-standing feud which started in2003, and reached a peak in 2013 with a public bashing episode on CNBC.

Icahn has vowed to fight back against Hindenburg, calling their report “self-serving”, as the firm took on a short position on his company before making the scalding report

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