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Prominent short seller Hindenburg Research is targeting well-known activist investor Carl Icahn. Led by Nathan Anderson, the company has taken a short position against Icahn Enterprises, claiming that the company's asset valuations are "inflated," among other reasons. Hindenburg Research alleges that this is causing an abnormally high net asset value premium in the holding company's publicly traded shares.
- In premarket trading, Icahn Enterprises decreased by 9%. The Florida-based holding company engaged in various industries such as energy, automotive, food packaging, metals, and real estate. According to FactSet, the company pays a dividend of 15.9% as a conglomerate. Hindenburg stated that it thinks the company's cash flow and investment performance do not support the high dividend yield.
Why it matters
Icahn, who is considered the most prominent corporate raider ever, gained fame for executing a hostile takeover of Trans World Airlines in the 1980s, which involved divesting the company of its assets. In his most recent endeavors, the billionaire investor has been involved in activist investing with McDonald's and the biotechnology company Illumina.
