Carl Icahn’s hedge fund shares fall 25% on attack on Bill Ackman
Shares in billionaire Carl Icahn’s investment firm plunged to their lowest level in nearly two decades on Thursday, a day after old rival Bill Ackman highlighted the company’s high valuation.
Icahn Enterprises LP’s stock fell as much as 25% to $18.03, compounding more than 60% losses recorded after short seller Hindenburg Research’s devastating attack on the company three weeks ago.
“(IEP’s dividend yield) is generated by returning capital to outside shareholders, which in turn is funded by the company selling shares to investors.” Ackman tweeted on Wednesday, echoing Hindenburg’s claim that IEP relies on a “Ponzi-like structure” to pay dividends.
Ackman said he was not long or short in the stock.
In a memorable row a decade ago, the billionaire shorted the dietary supplement company Herbalife, in which activist investor Icahn had a stake.
IEP did not respond to requests for comment on Ackman’s tweet.
At least one technical indicator is suggesting that the sell-off in IEP shares is overdone as the stock has traded below 30 on the Relative Strength Index (RSI) since May 22.
An RSI reading of 70 and above indicates an overbought stock, while a reading of 30 or less indicates the stock is oversold.