Icahn Enterprises Shares Plummet Following Dividend Cut
Shares of Icahn Enterprises, the diversified holding company founded by activist investor Carl Icahn, experienced a significant drop of 29% in premarket trading on Friday. This came as a result of the company's decision to cut its dividend. Short-selling investors had been putting pressure on the company in the second quarter, leading to this drastic action.
As of now, shares are valued at $23.33, a sharp decline from Thursday's closing price of $32.68. Overall, the stock has lost approximately 35% since the beginning of the year.
The board of Icahn Enterprises has now approved a quarterly distribution of $1 per share, which is down from the previous $2 per share.
In May, Hindenburg Research, an activist short seller, made allegations against Icahn Enterprises. They claimed that the company was being overvalued, the payout to shareholders was unsustainable, and Carl Icahn himself had taken out significant loans against his shares in the company, making it vulnerable to a sell-off.
In response to these allegations, Carl Icahn stated, "I believe the impact of short-selling on companies we control or invest in was partially reflected in the second-quarter results. This can be attributed to the misleading and self-serving Hindenburg report concerning our company."
During the second quarter, Icahn Enterprises reported a net loss of $269 million, or 72 cents per share, in comparison to a loss of $128 million, or 41 cents per share, during the same period last year.
Additionally, the company's revenue dropped by 30% to $2.68 billion. Analysts polled by FactSet had previously predicted revenue of $2.66 billion.
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