Carl Icahn’s firm cuts dividend in half after short-seller attack, shares slump By Reuters

By Niket Nishant

(Reuters) -Activist investor Carl Icahn’s eponymous agency lower its dividend in half on Friday, just some months after a outstanding short-seller went after the corporate’s payout construction that triggered a promoting frenzy in its shares.

Icahn Enterprises shares closed 23% decrease on Friday, and have shed greater than half of their worth since Might 2 when Hindenburg Analysis accused the corporate of working a “Ponzi-like” construction to pay dividends.

Icahn is likely one of the trade’s best-known activist buyers, however has struggled to reply to Hindenburg’s challenges, calling its allegations “deceptive.”

He has since restructured private loans that required him to publish collateral when the share value fell.

On Friday, he mentioned in a letter that the funding holding firm would refocus on activism, decreasing unsuccessful bets that the inventory market was due for a droop.

In the meantime, Hindenburg mentioned it remained quick on IEP in a publish on messaging platform X, previously often known as Twitter.

“Icahn Enterprises will ultimately lower or remove its dividend completely, barring a miracle turnaround in funding efficiency,” Hindenburg had mentioned in Might when it introduced the quick place.

IEP mentioned on Friday it will distribute $1 per depositary unit to its buyers for the second quarter, decrease than its standard payout of $2 per unit.

It additionally disclosed that it was cooperating with a division of enforcement of the U.S. Securities and Trade Fee (SEC)that had contacted in June for info on the corporate and sure of its associates.

Neither the U.S. Legal professional’s workplace nor the SEC has made any claims or allegations towards IEP or Icahn with respect to the foregoing inquiries, the corporate mentioned.

It mentioned losses widened to $269 million, or 72 cents per depositary unit, for the quarter. It misplaced $128 million, or 41 cents per unit, a 12 months earlier.

Shares fell as little as $20.54 throughout the session on Friday, hitting their lowest in over two months. Icahn has denied the allegations and has vowed to “struggle again” towards the quick vendor’s report.

“We don’t intend to let a deceptive Hindenburg report intrude with this follow (of distributing dividends),” Icahn Enterprises mentioned on Friday.

In a letter to buyers, Icahn touted his agency’s determination to reset its concentrate on its core activism technique, and mentioned it had “considerably” diminished hedges over the previous six months.

“Our returns have been overwhelmed by our overly bearish view of the market and associated outsized quick (hedge) positions,” the 87-year-old billionaire investor wrote.

Icahn final month mentioned he had restructured $3.7 billion in private loans to take away a hyperlink between his obligation to publish collateral and his holding firm’s share value.

After Hindenburg revealed its report in Might, IEP mentioned in a regulatory submitting that the U.S. Legal professional’s Workplace for the Southern District of New York was investigating the corporate.

It isn’t clear whether or not the scrutiny from federal regulators was associated to Hindenburg’s allegations. The corporate has supplied no replace since then.