(Reuters) – Hindenburg Research said on Tuesday it has a short position in activist investor Carl Icahn-controlled energy-to-pharma conglomerate Icahn Enterprises, making it the latest in a string of recent high-profile targets of the U.S. short seller.<\/p>\n\n\n\n
Shares of Icahn Enterprises fell nearly 10% in premarket trading after Hindenburg alleged that the valuation of IEP units was inflated by more than 75% and that “IEP trades at a 218% premium to its last reported net asset value (NAV), vastly higher than all comparables.”<\/p>\n\n\n\n
Icahn Enterprises did not immediately respond to a request for comment and Reuters could not independently verify the claims the short-seller has made in its report.<\/p>\n\n\n\n
Hindenburg also claimed Icahn was operating a “ponzi-like economic structure,” selling its units to new investors to support its dividend payouts.<\/p>\n\n\n\n
“In brief, Icahn has been using money taken in from new investors to pay out dividends to old investors.”<\/p>\n\n\n\n
Based in Sunny Isles Beach, Florida, Icahn Enterprises is one of the most successful activist investment firms and the chief investment vehicle of Icahn, who is known for his face-offs with several high-profile firms.<\/p>\n\n\n\n
As of last close, shares were down marginally this year, giving Icahn Enterprises a valuation of roughly $18 billion.<\/p>\n\n\n\n
Earlier this year, Hindenburg’s report on India’s Adani Group triggered a more than $100 billion rout in the conglomerate’s shares, and last month, the short seller took aim at Jack Dorsey-led Block Inc.<\/p>\n\n\n\n
Hindenburg invests its own capital and takes short positions against companies. After finding potential wrongdoings, it usually publishes a report and bets against the target company, hoping to make a profit.<\/p>\n\n\n\n
Short sellers typically sell borrowed securities and aim to buy these back at a lower price.<\/p>\n