2023-05-25 11:00:38 ET
Carl Icahn's Icahn Enterprises ( NASDAQ: IEP ) plunged 23% on Thursday as fellow billionaire hedge fund manager Bill Ackman suggested there could be more downside for the stock amid the Hindenburg short call and potential issues with margin loans.
The Icahn holding company has now plunged more than 40% this week and has fallen for the last five days. Icahn Enterprise ( IEP ) shares have plummeted more than 62% since the Hindenburg short report was released on May 2, erasing billions from the 87-year old Icahn's net worth.
Ackman, who was mainly known as an activist until recent years, had a famous showdown a decade ago with Icahn on CNBC over Ackman's Herbalife ( HLF ) short call. The billionaire has now injected himself into the IEP fight with a tweet on Wednesday, writing that IEP still trades at a 50% discount premium to NAV even after its tumble this month.
"Its performance history and governance structure do not justify a premium; rather, they suggest that a large discount to NAV would be appropriate," Ackman tweeted.
Ackman also suggested that Icahn's margin lender (s) may be "extremely concerned" with the current situation. Hindenburg originally raised concerns about margin loans in his report earlier this month, where he said IEP's NAV is "overvalued."
"All it takes is for one lender to break ranks and liquidate shares or attempt to hedge, before the house comes falling down," Ackman tweeted on Wednesday.
Ackman said he's neither long nor short Icahn Enterprises, "just watching from a distance."
Icahn Enterprises ( IEP ) said in its response to the Hindenburg report that Icahn has advised that he and his affiliates are current and in full compliance with all personal loans. IEP also said earlier this month that the short report didn't impact its liquidity.
More on Icahn Enterprises
- Icahn Enterprises: Distribution Maintained, But Bonds And Options Are Not Biting
- Billionaire Carl Icahn says bearish market bets were a mistake - report
- Icahn Enterprises: Stay Out Of The Hindenburg Fight
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Icahn Enterprises tumbles 23% amid salvo from Bill Ackman