Icahn Enterprises L.P. (NASDAQ: IEP), the holding company owned by billionaire investor Carl Icahn, has experienced a significant drop in its stock price. In the past three months, the company’s shares have tumbled by an alarming 60%, reaching their lowest point in nearly fourteen years, marking a downturn not witnessed since March 2010.
This unprecedented decline follows damaging allegations made by Hindenburg Research on May 2, suggesting that Icahn may be involved in a Ponzi scheme, subsequently sending the stock into a tailspin.
The situation worsened on May 10 as shares plummeted an additional 20% during morning trading, compounding a near 25% loss from the previous week. The catalyst for this decline came in the form of a regulatory filing revealing that the U.S. attorney’s office for the Southern District of New York had contacted Icahn Enterprises, seeking crucial information related to corporate governance, capitalization, securities offerings, dividends, valuation, marketing materials, due diligence, and other pertinent materials.
Adding fuel to the fire, the long-standing feud between Carl Icahn and prominent hedge-fund manager Bill Ackman has resurfaced. Originating in 2012, their conflict emerged from opposing market positions held by the renowned supplement company, Herbalife Ltd. (NYSE: HLF). In a recent tweet, Ackman drew striking parallels between Icahn Enterprises and Archegos, highlighting the presence of a price premium of over 50% in comparison to the company’s net asset value.
The current circumstances pose an immense challenge for Icahn Enterprises, raising questions about the company’s ability to weather the storm and recover from these substantial setbacks. With the fate of the enterprise hanging in the balance, only time will reveal whether Icahn Enterprises can regain its footing in the face of these daunting obstacles.