Topline
Infamous activist firm Hindenburg Research unveiled its latest target Tuesday, alleging billionaire investor Carl Icahn’s storied holding company has artificially propped up its stock price with a “ponzi-like economic structure”—claims Icahn hasn’t yet acknowledged.
Carl Icahn’s empire faces a new notable challenger.
Key Facts
Icahn Enterprises, the holding company behind Icahn’s investments and primarily owned by the 87-year-old and his son, has artificially propped up its stock price by 75%, Hindenburg alleged Tuesday, disclosing it took a short position in the company.
The stock traded at the premium thanks to “far-inflated” estimates on its investment returns and a “ponzi-like economic structure” enabling the company to pay out massive dividend payments.
Shares of Icahn Enterprises slipped 9% in early trading, hitting a multiyear low.
Hindenburg alleged the investment bank Jefferies played a role in Icahn’s scheme by publishing bullish research reports and selling Icahn Enterprises’ stock to investors.
Icahn Enterprises and Jefferies did not immediately respond to Forbes’ request for comment.
Crucial Quote
The Hindenburg report concludes: “Carl Icahn has built an aura of invincibility around himself—a titan of Wall Street with a knack for coming out on top. But while the focus has always been on his grand public activist campaigns, quieter long-term investment losses, along with the substantial use of leverage, have whittled away his empire.”
Forbes Valuation
Icahn is worth $17.6 billion as of Monday’s market close, according to our latest estimates, making him the 95th-richest person on the planet.
Key Background
Icahn is the latest billionaire titan targeted by Hindenburg this year, joining Indian tycoon Gautam Adani and Twitter and Block cofounder Jack Dorsey. Perhaps the best-known “corporate raider” in American history, Icahn made his billions by staging a host of activist fights, including at McDonald’s, Dell and Nabisco.
Further Reading
There’s Evidence That The Adani Group Likely Bought Into Its Own $2.5 Billion Share Sale (Forbes)
Billionaires Dorsey, McKelvey Profited From Block’s ‘Rampant’ Fraud, Hindenburg Alleges (Forbes)
Legendary Investor Carl Icahn Dishes On McDonald’s, Wall Street And His New HBO Doc (Forbes)
Source: https://www.forbes.com/sites/dereksaul/2023/05/02/billionaire-carl-icahns-empire-propped-up-by-ponzi-like-scheme-short-seller-hindenburg-claims/