IEP stock price has shown buyers’ strength and surged nearly 6.73% in the last session after the price made an attempt to break below the $20 level. The stock has continued its decline for the last 6 months and lost 33% of its value in the last month.
Hindenburg, a short-seller, accused Icahn Enterprises of using a “Ponzi-like” scheme to pay its high dividend yield, which supported its share price. The short-seller predicted that Icahn would have to stop this dividend, which would cause the stock price to collapse.
This scenario is unfolding quickly and accurately. Icahn Enterprises slashed its dividend by 50% earlier this month to restructure its finances, which dragged the shares down. The stock is probably still suffering from the dividend reduction this week.
Hindenburg remains bearish on the stock and thinks that Icahn Enterprises will eventually have to eliminate its entire dividend to compensate for the bad investments it made.
Icahn admitted that the investment firm has made some recent blunders such as going against the general market this year, which has soared significantly. Its long positions have also faltered, creating a double blow of underperformance.
IEP stock option-chain analysis states that the current implied volatility in the market is 60.16% with an increment of 1.18% in the last trading session. The at-the-money strike price has 42 open contracts on the put side and 176 open contracts on the call side indicating the dominance of sellers at the current level. The PUT/CALL ratio is 1.07 indicating that call writers dominate the market as per the data.
IEP Stock Price Trading Near the Swing Low And Slid More After The Breakdown
The IEP stock price currently trades at $20.78 and struggling to sustain near the lower levels after a sharp decline.
The forecast of the stock price states that the price trend is bearish in both the short term and the long term. And may continue with the same if it breaks below the swing low again.
The Stock needs to gain the trust of investors to surge higher again as the Ichan Enterprises company is in a messy situation now. The company may likely cut its dividends unless its investment performance turns around.
The Technical Indicators Showing Weakness On The Daily Chart
Conclusion
IEP stock price has fallen 33% in a month due to a short-sellers accusation of a “Ponzi-like” dividend scheme. The company cut its dividend by half, which hurt the shares further. Hindenburg expects the dividend to be eliminated completely. The stock is trading at $20.78 and facing a bearish trend in both the short and long term. The company needs to improve its investment performance to regain investors’ confidence.
Technical Levels
- Support levels: $20.06 and $17.50.
- Resistance levels: $26.26 and $30.45.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
Source: https://www.thecoinrepublic.com/2023/08/24/iep-stock-price-forecast-can-bulls-continue-with-the-momentum/